Ohio Attorney General Dave Yost has filed suit to remove two State Teachers Retirement System board members for breaching their fiduciary duties.
The suit filed in Franklin County Common Pleas Court on Tuesday claims that board members Wade Steen and Dr. Rudy Fichtenbaum are seeking to steer as much as 70% of STRS' current assets — about $65 billion in teacher pension funds — to a shell company with backdoor ties to the pair.
"Upon information and belief, the owner of this shell company continues to peddle to STRS a secretive and untested investment scheme while his own condominium is in foreclosure," the suit said.
STRS oversees $91 billion on behalf of 500,000 members including 150,000 retirees and beneficiaries.
The 11-member STRS board is scheduled to meet Wednesday afternoon.
A week ago, Yost's office said it had opened an investigation into concerns that STRS was susceptible to a hostile takeover by private interests.
Yost said in an emailed release that he would take whatever action is necessary to protect teachers against private interests attempting to hijack their retirement accounts.
He said his office had received documents containing allegations related to the STRS board.
On May 8, Gov. Mike DeWine said STRS had retained consulting firm Aon to provide guidance on corporate governance. But DeWine said he recently learned that Aon was severing its contract.
DeWine called it "a huge red flag, calling into question how STRS is operating and providing oversight."
