PaineWebber Settles Pension Fund Dispute with Nashville

Nashville accused PaineWebber of charging excessive fees for managing its pension fund, as well as understating risks and misleading it about investment strategies.

PaineWebber will pay $10.3 million to settle. About three quarters of that sum is to reimburse the pension fund for the excessive commissions.

This settlement represents the largest one involving conflict of interest with a pension fund. PaineWebber had not charged the pension fund a flat fee, as is common, but instead commissions for each trade.

Source: New York Times, April 4, 2002