Ohio Attorney General Dave Yost filed a lawsuit Wednesday, calling for the removal of Wade Steen and Rudy Fichtenbaum from the board of the State Teachers’ Retirement System of Ohio, accusing the two of colluding with an outside organization to influence the STRS Ohio system.
Steen and Fichtenbaum belong to a group of board members known as the “reformers,” who seek to increase cost-of-living adjustments and contribution rates for the fund and have criticized the compensation of investment staff. The attorney general, however, has accused the duo of wanting to direct investment of the majority of the pension fund’s assets to an unqualified manager with ties to the men.
The reformer faction holds a 6-5 majority of board seats. On Wednesday, the board voted 6-5 to remove the board’s Chairman Dale Price and installed Fichtenbaum in the seat.
The lawsuit, accuses Steen and Fichtenbaum of seeking to implement a plan that would see roughly 70% of STRS Ohio’s assets, or roughly $65 billion, come under the management of an outside entity called QED Technologies LLC. The lawsuit alleged that QED is a shell company with “backdoor ties” to Steen and Fichtenbaum, run by associates of the two with little to no investment experience or track record.
In a STRS Ohio board meeting on Wednesday, Steen called the attorney general’s case a sham investigation.
Ohio Governor Mike DeWine removed Steen from the board last year, but he was reinstated last month after a judge deemed that DeWine did not have the authority to remove him. Aon, the pension fund’s consultant dropped the fund as a client upon Steen’s reappointment to the board.
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Tags: Aon, Dave Yost, Mike DeWine, Ohio, Rudy Fichtenbaum, State Teachers Retirement System of Ohio, STRS Ohio, Wade Steen