University of California Bears Down on Enron

The aggregate total loss across all University of California portfolios is $145 million, roughly 0.30% of the university’s total investment funds of some $54 billion at November 30.

Despite that loss, the University of California Retirement Plan (UCRP) portfolio performed within 0.08% of its benchmark and remains in a ‘strong overfunded position,’ according to David H. Russ, treasurer to the UC Regents.

Loss ‘Leaders’

Recently, the pension systems of Florida (see  Retirement Funds Take On Enron at ) and New York ( NY Fund Turns Up Heat on Enron, Joins Exec Asset Freeze Suit at ) have also joined in legal actions against Enron, which is also under fire from retirees and participants in its 401(k) plan that was heavily invested in stock of the firm. Enron has also recently found itself the focus of a number of Congressional investigations regarding its financial reporting and its practices regarding its benefits programs.

The suit, currently pending in the U.S. District Court for the Southern District of Texas in Houston, alleges that purchasers of Enron securities between October 19, 1998, and November 27, 2001, were the victims of a ‘fraudulent scheme’ as a result of the dissemination of false financial statements which artificially inflated the price of Enron securities. The suit alleges that inflation allowed defendants to engage in $1.1 billion of illegal insider trading.

UC is joining a suit seeking a refund of defendants’ $1.1 billion or more of insider-trading proceeds as well as compensatory damages, among other items.

Milberg Weiss Bershad Hynes & Lerach LLP, a firm that specializes in representing institutional investors damaged by corporate malfeasance, securities fraud and insider trading, represents UC.