Florida Cabinet Assured State Board of Administration Has No Equity Stake in Goldman Sachs

At the April 27, 2010 Florida Cabinet meeting, State Board of Administration (“SBA”) Executive Director Ash Williams assured Cabinet members that the SBA has no equity exposure in Goldman Sachs Group Inc., which is currently under federal scrutiny for allegedly taking market positions against the investments it was selling.

In response to a question from Florida Chief Financial Officer Alex Sink, Mr. Williams said that, aside from a proportional share in the Russell 3000 index, which comprises about 98 percent of U.S. publicly traded equities (and thus a share of Goldman Sachs), the SBA does not, and never has, owned any of the Goldman Sachs securities now under scrutiny by the U.S. Securities and Exchange Commission (“SEC”).  Mr. Williams said the SBA has two fixed-income management relationships with Goldman Sachs, both of which were performing “close to benchmark.”

Mr. Williams said he had recently spoken with an unnamed “management member” at Goldman Sachs, who assured him that no new revelations of unfavorable material news were forthcoming.  Mr. Williams said the management member told him that Goldman Sachs is “comfortable with [the company’s] position” regarding the SEC’s investigation and that all relevant materials requested by the SEC have been made public.

Mr. Williams commented, and CFO Sink agreed, that it was still “too early” to know what impact the federal investigation into Goldman Sachs might have on that company’s long-term status. 

The Cabinet also approved the following two SBA agenda items on April 27:

1. The SBA’s Quarterly Report required by the Protecting Florida’s Investments Act (“PFIA”). This report includes a list of “Scrutinized Companies” with activities in Sudan and Iran. The PFIA prohibits the SBA, acting on behalf of the Florida Retirement System Trust Fund, from investing in, and requires divestment from, foreign-based companies involved in certain types of business operations in or with Sudan or Iran, specifically involving the petroleum or energy sector, oil or mineral extraction, power production or military support activities.

Mr. Williams reported that no companies were added to the Sudan Scrutinized Companies list, while one was removed.  Four companies were added to the Sudan Continued Examination List, while two were removed, he said.  Mr. Williams said that no companies were added or removed from the Iran Scrutinized Companies or Continued Examinations lists.

2. A draft letter to the Joint Legislative Auditing Committee affirming that the SBA Trustees have reviewed and approved the monthly Florida Local Government Investment Pool (“LGIP”) Management Summary reports and actions taken, if any, to address any [material] impacts. Mr. Williams reported that there were no material impacts during the first quarter of 2010.

Materials referenced in the SBA agenda can be viewed by clicking here.

To view the entire April 27 Cabinet agenda, click here.  The next Cabinet meeting is scheduled for May 11, 2010.

Should you have any questions or comments, please contact Colodny Fass.

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