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.