The Associated Press reports that David Bronner, CEO of theRetirement Systems of Alabama (RSA) (see Local Hero , Maverick ) indicated that RSA had paid $10 per share to the original owners of the 73,000 Liberty shares plus interest. Bronner said that covered the difference between what RSA originally paid for the shares in August 2005 and their value after the announcement that Raycom Media was buying Liberty for almost $1billion.
The issue was that RSA had information about the pending M&A deal for a substantial premium over Liberty’s share price because it was planning to provide financing for the transaction.
The situation eventually sparked a U.S. Securities and Exchange Commission (SEC) probe and a SEC warning to public pension funds of their requirement to obey federal securities laws including those regarding insider trading (see SEC Insider Trading Probe Prompts Public Pension Warning) .
Bronner said that under SEC rules, Raycom could have purchased 5% of Liberty’s stock before the deal was announced, but RSA couldn’t purchase stock using information about the pending deal because the pension fund does not own Raycom, the Associated Press said.
When it released its investigative report last week, the SEC said it took no action against the RSA because of RSA’s cooperation with investigators.
The SEC investigative report is here .
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