For Immediate Release
September 17, 2008
Comptroller Susan Combs Cuts TexPool’s Ties With Lehman Brothers Inc.
(AUSTIN) — Texas Comptroller Susan Combs announced today that she has terminated the state’s contract with Lehman Brothers Inc. to provide marketing and client services to TexPool and TexPool Prime, which are investment pools for local governments. Combs emphasized that Lehman only provided marketing services — not investment management.
Lehman Brothers Inc. is owned by Lehman Brothers Holdings Inc., which filed for Chapter 11 bankruptcy protection on Monday.
Combs reassured investors that the bankruptcy filing poses absolutely no threat to local governments invested in TexPool and TexPool Prime. Those investments are managed by a separate company, Federated Investors Inc.
Although Lehman Brothers Inc.only handled marketing and client services, Combs said the termination is necessary to maintain TexPool investors’ confidence.
“Investors are currently suffering the effects of one of the greatest crises of confidence in the capital markets in recent memory,” Combs said in her termination notice. “Given Lehman Brothers declaration of bankruptcy, the fragile state of the capital markets and the heightened sensitivity of investors to adverse news, the continued affiliation of TexPool with Lehman Brothers is unacceptable.”
Lehman Brothers Inc. has 30 days to transition its TexPool marketing and client services to Federated Investors Inc.