Considering a Duty to Hedge
|Jan 30th, 2012 | Filed under: Institutional Investing, Today's Post | By: cfaille||
The Hartford (CT) CFA Society recently hosted a workshop on “Pension Risk Management and Governance.” The discussion proved to be mostly, though not exclusively, about ERISA and about how plan sponsors may arm themselves against the sorts of litigation it may inspire.
Moderator Martin Rosenburgh, who is both an attorney and a financial analyst, and currently working as a compliance consultant to investment managers, set the tone early. He discussed “fiduciary duty on the strategic level,” saying that most of the case law in which plan managers are found to have violated their duty arises out of the manager “acting affirmatively,” by for example buying over-priced works of art.
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Christopher Faille is a Jamesian pragmatist. William James has taught him, for example, that "you can say of a line that it runs east, or you can say that it runs west, and the line per se accepts both descriptions without rebelling at the inconsistency."
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