Indiana Settling Lawsuits With Everyone But Teachers Union

It has been almost three years since the Indiana State Teachers Association’s health insurance trust collapsed due to risky investments, resulting in the forced retirement of the union’s executive director, an NEA administratorship, and a boatload of lawsuits in all directions at once.

Noteworthy among these are the lawsuits filed by the Indiana securities division against ISTA and the financial services companies and individuals involved in the investments. Last June, the government reached a $677,000 settlement with UBS Financial Services in fines and investigative costs. Last week, the state settled with David Karandos, who was an investment adviser for the ISTA trust. Karandos, who now works for Morgan Stanley, “will be suspended for 75 days and could pay up to $50,000 in restitution.”

Since the state has not settled its lawsuit against ISTA itself, is it not reasonable to assume that these settlements might include some agreement on the part of UBS and Karandos to assist in that case? If so, it would be extremely bad news for the union, which by its own admission won’t be out of the red until 2027.

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