According to a regulatory filing with the Securities and Exchange Commission (SEC), the suit was filed by Lawrence E. Jaffe Pension Plan in federal district court in the Southern District of New York.
Dow Jones says the suit names as defendants the company, fund manager Alfred Harrison, and Alliance Premier Growth Fund.
The complaint alleges that the defendants breached their fiduciary duties of loyalty, care, and good faith to the fund by causing the fund to invest in the securities of Enron, which filed for bankruptcy protection in December. The suit also alleges that agreements between the fund and the partnership violated the Investment Company Act of 1940 because all of the directors of the fund should be deemed interested under the act.
The plaintiff is seeking damages equal to the pension fund’s losses as a result of the fund’s investment in Enron and a recovery of all fees paid to the partnership beginning November 1, 2000.
Alliance Capital said it plans to “vigorously defend” against the allegations, which it says are without merit, according to the Dow Jones report.
In June the Florida State Board of Administration formally sued Alliance for investments the firm made on the state’s behalf in Enron (see It’s Official: Florida Sues Alliance Over Enron ).
The investment firm continued to buy Enron shares heavily even after finding out the company was in trouble (see Florida to Join Enron Suit, May Lead ). The pension system fired Alliance Capital Management, its money manager of 15 years, after the firm invested the system’s money in 4.9 million Enron shares through its large-cap growth fund between August and November – despite signs of trouble.