Trading Now

Trading Now

Wednesday, July 29, 2009

BlackRock, Goldman Fund Contracts Pulled by U.S. Pension Agency

July 29 (Bloomberg) -- The U.S. Pension Benefit Guaranty Corp. revoked contracts with BlackRock Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. as the former head of the agency is being investigated by Congress over his relationships with money managers.

The fund-management contracts, announced in December, were terminated on July 20, Jeffrey Speicher, a spokesman for the Washington-based pension agency, said today in an e-mail. The PBGC, which oversees pension plans of bankrupt companies, selected the three firms to manage $2.5 billion in private- equity and real-estate assets.

Charles E.F. Millard, a Bush administration appointee, took over in December 2007 as head of the agency, which guarantees pensions for 44 million Americans. A May 2009 report by the PBGC’s inspector general alleges that Millard had inappropriate communications with eight of 16 Wall Street firms that bid last year to manage $2.5 billion of the agency’s $48 billion investment portfolio. Millard left the agency in January 2009.

Millard, 52, may have violated “blackout” rules that prohibited him from contacting bidders on three contracts for “strategic partnerships” that were to involve investments in stocks, real estate and private-equity assets, the May report said. The House Education and Labor Committee said at the time it will examine whether any laws were broken.

Millard sought to “implement a policy change to secure the agency’s future,” his attorney, Stanley Brand, said in a statement. “He sought advice from top professionals in a responsible and legal manner. The choices that he, his colleagues and PBGC’s board of directors made were strictly on the merits.”

The New York Times today reported that BlackRock and Goldman Sachs engaged in “extensive wooing” of Millard in an effort to win the contracts.

No comments:

Post a Comment


Wikinvest Wire