Florida Cabinet to Vote on Enron Suit

April 23, 2002 (PLANSPONSOR.com) - The Florida State Board of Administration released a recommendation to move forward with a suit against Alliance Capital Management Holding for losing some $282 million of its pension assets through investments in Enron stock.

The three-member cabinet, which oversees the board, was scheduled to vote on the recommendation at its meeting today.

Lawyers for the fund have advised the $100 billion pension fund to sue the asset manager for breach of contract and fiduciary duty, according to a report from the Wall Street Journal.

An Alliance spokesman said the firm would defend itself vigorously in the event of legal proceedings, arguing that the firm had served Florida for 17 years, creating more than “a billion dollars of wealth,” Enron losses notwithstanding.

Alliance recorded losses of about $321 million in the retirement system’s Enron holdings and was fired by the board last December.

Lawyers for Florida charge that Alliance started accumulating huge quantities of Enron stock the day after Enron’s then chief executive, Jeffrey Skilling, left the company, and continued on this Enron purchasing spree even after the beleaguered energy trader announced a formal investigation by the Securities and Exchange Commission, according to reports. Two days before Enron entered bankruptcy proceedings, Alliance sold 7.5 million shares.