Indiana State Teachers Association Reaches Settlement With Investment Firm

Remember the Indiana State Teachers Association health care trust meltdown? The $67 million deficit led to the forced retirement of the executive director, an NEA trusteeship, and a slew of lawsuits, both by and against the union.

ISTA sued UBS Financial Services, claiming the firm sold “unsuitable investments” to the trust. We now learn that a settlement was reached three weeks ago, the only public details of which are that “UBS has undertaken to purchase from ISTA a number of the Funds and to otherwise take steps to provide liquidity to ISTA.”

UBS was also sued by the state of Indiana, and as part of a separate settlement will pay a $450,000 fine plus $227,000 in investigative costs to the state securities division.

“We’re glad to see a resolution to this part of an ongoing investigation into other violations related to the troubles surrounding ISTA,” said Indiana Secretary of State Charlie White. “We will continue to peel away each layer of this case until we have done all we can to account for the losses incurred.”

The union and the state have agreed to hold the UBS funds for 60 days while they “work to properly designate the distribution of the relief funds.”

The secretary’s web site has an entire page devoted to the ISTA litigation.