Cabinet to Williams: Keep us better informed

Cabinet to Williams: Keep us better informed



TALLAHASSEE — Managers of the state’s $113.5 billion pension fund should have done a better job keeping Cabinet members informed of an ongoing investigation by federal regulators, the panel told State Board of Administration executive director Ash Williams on Tuesday.

Williams came under fire after news reports surfaced in early November that the Securities and Exchange Commission in mid-2008 had ramped up its investigation involving the sale of security-backed investments that tumbled in late 2007.

The SBA countered that it posted information on its Web site about the investigation in March 2008. It did not however, keep SBA board members appraised of every development in the ongoing probe. In July 2008, the SEC issued a formal order outlining its investigation as part of a legal process needed so it could subpoena records surrounding the sale of mortgage-backed securities that precipitously fell in value. The freefall caused a run on the state’s Local Government Investment Pool, which is used by cities and counties much like a high yield checking account.

The SBA did not inform the board of the change in the status of the case. That brought admonition on Tuesday by the three Cabinet members who oversee the SBA – Gov. Charlie Crist, Chief Financial Officer Alex Sink and Attorney General Bill McCollum.

“Whenever there is a legal matter pending …I think we should be briefed on it,” said McCollum, echoing concerns of both Crist and Sink. “We don’t need to be reading something in the press that may have been blown out of proportion.”

Williams said Tuesday he felt trustees had been adequately updated on substantive developments in the SEC investigation, which was looking into Lehman Bros. and companies that sold the securities to the state. Since he took over the agency in early 2008, Williams said additional safeguards have been put in place to monitor state investments and the companies with which it does business.

Included in a series of changes are new proposed rules regulating third party “placement agents,” who work with smaller funds to solicit business with the state. Plans include requiring such agents to disclose specifically how much they are being paid by companies that in turn sell investment products to the state.

And in an abundance of caution, Williams said he will do a better job of keeping the Cabinet informed on legal issues and other aspects of the state’s investment portfolio.

“Each and every change in the breeze will be brought to your attention,” Williams said.

Williams’ comments Tuesday came after he informed the board that the state’s pension fund value has increased by 20 percent since the first of the year. At close of business Monday, the retirement fund totaled $113.5 billion.