IBJNews

Teachers trust fund broker reaches settlement

Back to TopCommentsE-mailPrintBookmark and Share

David Karandos, a broker who advised the Indiana State Teachers Association Insurance Trust before it collapsed in 2009, has reached a settlement over a 13-count complaint filed by the Indiana Secretary of State’s Securities Division.

Karandos agreed to a 75-day suspension from working in the securities industry and may pay up to $50,000 in restitution as part of the agreement, the secretary of state’s office announced Tuesday. Karandos also admitted to facilitating sales of alternative products in excess of ISTA Insurance Trust’s investment policy.

The complaint, filed in 2010, alleged that Karandos advised the ISTA to invest its trust fund reserves in alternatives such as hedge funds and private equity funds—illiquid investment products that come with long-term obligations, but offered large up-front commissions for Karandos.

The ISTA Insurance Trust was responsible for the issuance of medical and long-term disability plans endorsed and provided by ISTA. The medical plan offered a feature that allowed school corporations to set aside their excess balances in order to earn investment returns to be used to offset future costs. Karandos, a former investment adviser at Morgan Stanley and UBS, was responsible for advising the trust on how to invest and calculate a rate of return for these dollars.

The trust was sued by the secretary of state’s office in 2009 after an investigation found the value of the trust’s investments had plunged 55 percent in the previous 20 months, leaving it $67 million short of its liabilities.

The suit said ISTA officials acted as investment advisers without the proper licenses and accused them of co-mingling money meant for health benefits with other funds, including payments to a long-term disability plan.

The suit alleged the co-mingling led ISTA officials to lose track of $23 million.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. From the story: "The city of Indianapolis also will consider tax incentives and funding for infrastructure required for the project, according to IEDC." Why would the City need to consider additional tax incentives when Lowe's has already bought the land and reached an agreement with IEDC to bring the jobs? What that tells me is that the City has already pledged the incentives, unofficially, and they just haven't had time to push it through the MDC yet. Either way, subsidizing $10/hour jobs is going to do nothing toward furthering the Mayor's stated goal of attracting middle and upper-middle class residents to Marion County.

  2. Ron Spencer and the entire staff of Theater on the Square embraced IndyFringe when it came to Mass Ave in 2005. TOTS was not only a venue but Ron and his friends created, presented and appeared in shows which embraced the 'spirit of the fringe'. He's weathered all the storms and kept smiling ... bon voyage and thank you.

  3. Not sure how many sushi restaurants are enough, but there are three that I know of in various parts of downtown proper and all are pretty good.

  4. First off, it's "moron," not "moran." 2nd, YOU don't get to vote on someone else's rights and freedoms that are guaranteed by the US Constitution. That's why this is not a state's rights issue...putting something like this to vote by, well, people like you who are quite clearly intellectually challenged isn't necessary since the 14th amendment has already decided the issue. Which is why Indiana's effort is a wasted one and a waste of money...and will be overturned just like this has in every other state.

  5. Rick, how does granting theright to marry to people choosing to marry same-sex partners harm the lives of those who choose not to? I cannot for the life of me see any harm to people who choose not to marry someone of the same sex. We understand your choice to take the parts of the bible literally in your life. That is fine but why force your religious beliefs on others? I'm hoping the judges do the right thing and declare the ban unconstitutional so all citizens of Wisconsin and Indiana have the same marriage rights and that those who chose someone of the same sex do not have less rights than others.

ADVERTISEMENT