S.B. County Retiree Unit Settles Investment Suit

The San Bernardino County Employees’ Retirement Assn. announced Monday that it had entered into a settlement with 21 other claimants against a money management outfit that lost an estimated $415 million of the claimants’ money before going out of business last year.

The retirement association said it originally invested about $460 million with Advanced Investment Management Inc. and lost an estimated $63 million from its $3.2-billion employee retirement fund investment pool. The association has settled for $2.23 million.

In June, county staff said it uncovered irregularities in the account with AIM, based in Pittsburgh, Pa., and quickly began to freeze the account. Retirement association officials have alleged that AIM used unauthorized leveraged investments to try to recoup losses and mask the problem.

The association eventually sued AIM and later joined several other plaintiffs -- including the Minneapolis Teachers’ Retirement Fund Assn., Contra Costa County and a Dow Chemical employees pension plan fund -- in determining the financial assets of AIM and its principal officers. The plaintiffs determined that AIM’s assets amounted to about $14.6 million.

“Our choice was clear-cut: Settle now or risk receiving much less due to ongoing litigation costs and the very real, distinct possibility that AIM’s insurance carrier would reject the terms of the global settlement,” said Allen Builteman, chairman of the county’s retirement association board. He said the AIM loss will not affect the benefits for retirees or beneficiaries.