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FIDUCIARY CONCERN: New York Life lawsuit alleges adviser conflict; Employees say transfer of $125 million from MainStay delayed 3 years by fund president.

Publication: Pensions & Investments
Publication Date: 11-JUN-01 		Format: Online - approximately 1268 words
Delivery: Immediate Online Access

Article Excerpt
NEW YORK - The investment adviser to New York Life Insurance Co.'s defined benefit and 401(k) plans delayed moving $125 million from the poorly-performing MainStay Value Equity Fund for almost three years after fund trustees directed her to move the assets, plan participants claim.

The investment adviser, Linda Livornese, was president of New York Life's MainStay Institutional mutual funds.

If proved true, the newest allegations in the lawsuit brought by New York Life employees against the company over how the firm manages its pension plans raise considerable fiduciary concern, according to attorneys and consultants.

In documents used as exhibits in the latest round of the class-action suit, plan participants contend that trustees of New York Life's defined benefit and 401(k) plans had hired Ms. Livornese as their investment adviser.

According to internal memos and board of trustee minutes attached to court documents, Ms. Livornese steered money into the MainStay funds. In one example, plaintiffs' claim, the memos show that she delayed for close to three years transferring $125 million out of the MainStay Value Equity Fund, which was faltering. The trustees had in 1998 recommended the assets be moved...

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