inslaw , inc. is a washington , d.c. based information technology company that markets case management software for corporate and government users .

inslaw is known for developing promis , an early case management software system .

it is also known for a lawsuit that it brought against the united states department of justice in 1986 over promis .

inslaw won damages in bankruptcy court , but these were overturned on appeal .

the suit resulted in several justice department internal reviews , two congressional investigations , the appointment of a special counsel by attorney general william p. barr , and a lengthy review of the special counsel 's report under attorney general janet reno .

inslaw 's claims were finally referred by congress to the court of federal claims in 1995 , and the dispute ended with the court 's ruling against inslaw in 1998 .

during the 12-year long legal proceedings , inslaw accused the department of justice of conspiring to steal its software , attempting to drive it into chapter 7 liquidation , using the stolen software for covert intelligence operations against foreign governments , and involvement in a murder .

these accusations were eventually rejected by the special counsel and the court of federal claims .

inslaw

real history archives : inslaw : some more information , including a summary of inslaw’s claims .
33 . inslaw insists that a memorandum [ inslaw exhibit no . 68 ] dated may 5 , 1986 which was prepared by marion holton , inslaw ' s
according to bankruptcy court records , a company controlled by brian offered to buy inslaw when inslaw came under financial pressure because the justice department began to withhold software payments . hamilton refused to sell and inslaw was plunged into bankruptcy .
inslaw ' s new allegations described the justice department dispute with inslaw as part of a broad conspiracy to drive inslaw into bankruptcy so that earl brian , the founder of a venture capital firm called biotech ( later infotechnology ) , could acquire inslaw ' s assets , including its software promis . inslaw owner william hamilton told psi investigators that brian had first attempted to acquire inslaw through a computer services corporation he controlled , called hadron . hamilton said that he rejected an offer from hadron to acquire inslaw , and that brian then attempted to drive inslaw into bankruptcy through his influence with attorney general edwin meese . [ 49 ]
in 1978 , princeton university awarded the rockefeller public service award to inslaw ' s founder and to inslaw ' s first customer for their work with promis .
meanwhile , the government attempted to force inslaw into liquidation , by seeking to convert its chapter 11 reorganization into a chapter 7 liquidation that would have put inslaw permanently out of business . that effort ultimately failed and inslaw continues to operate .
mark gorton attributes responsibility for the inslaw affair to the cabal . [ 1 ]
entity tags : william hamilton , us department of justice , inslaw , inc .
entity tags : inslaw , inc . , us department of justice , peter videnieks
entity tags : elliot richardson , us department of justice , inslaw , inc .
in re inslaw , inc . , 76 b . r . 224 – urltoken
ii . sovereign immunity does not insulate the defendants against inslaw ' s claims .
in re inslaw , inc . , 97 b . r . 685 – urltoken
united states of america , et al . , appellants , v . inslaw , inc . inslaw , inc . v . united states of americ . . .
to remind the cia director of something to which the inslaw matter is connected .
the justice department withheld payment for the software , and inslaw went into bankruptcy . inslaw hired former attorney general elliot richardson as their attorney . richardson filed a civil suit claiming that inslaw had been the victim of a conspiracy by the justice department .
on the next page , the fbi document describes how leigh ratiner , inslaw’s attorney , had been fired from his law firm for his “failure to control” inslaw . ratiner believed that this was in retaliation for naming lowell jensen in the inslaw suit .
once the doj had control of promis , it dogmatically refused to verify that inslaw had created the enhancements , essentially rendering the contract modification useless . when inslaw protested , the doj began to withhold payments . two years later , inslaw was forced into bankruptcy .
the inslaw ( promis ) case was a complex and as yet unclear deep event .
entity tags : inslaw , inc . , house judiciary committee , us department of justice
entity tags : inslaw , inc . , us supreme court , us department of justice
promis inslaw clinton systematics fusiongps all related . . . is this the missing link ?
in re inslaw , inc . , debtor . inslaw , inc . , plaintiff , v . united states of america and the united states department of justice , defendants .
formerly been employed as general counsel of inslaw ' s predecessor between 1974 and 1976 .
inslaw ' s analysis and rebuttal of the bua report , july 11 , 1993 .
riconosciuto is currently in chicago testifying to the special grand jury on the inslaw case .
relief of inslaw , inc . , and william a . hamilton and nancy burke hamilton
in litigation discovery several years later , inslaw learned that the executive office for u . s . attorneys had been so upset with hamilton’s april 1982 memorandum that it considered terminating inslaw’s three - year contract one month after awarding it to inslaw in march 1982 .
the bua report summarizes inslaw ' s main allegations on pp . 3 - 10 .
as an initial proposition , i disagree with defendants ' characterizations of inslaw ' s claims . inslaw ' s claims are grounded squarely in bankruptcy law ; inslaw seeks relief for violations of the automatic stay imposed by section 362 ( a ) of the bankruptcy code .
in re inslaw , inc . , debtor . inslaw , inc . , plaintiff , v . the united states of america and the united states department of justice , defendants .
later , during the summer of 2001 , admiral daniel murphy , a former senior national security and intelligence official , read the same 50 - page inslaw summary at inslaw’s request .
cia / usdoj stolen inslaw promis spy software urltoken enduring innovation for over 36 years , inslaw has been a pioneer in the development of software products for the . . . more
for some , thornburgh ' s response to inslaw is the central mystery of the case .
entity tags : inslaw , inc . , daniel murphy , national security agency , william hamilton
entity tags : bureau of justice statistics , us department of justice , inslaw , inc .
entity tags : inslaw , inc . , lowell jensen , edwin meese , house judiciary committee
inslaw , inc . v . united states of america and united states department of justice .
angel of death gives deposition to justice department in inslaw case , by j . orlin grabbe
( how did inslaw know that the u . s . government had sold the product without authorization ? because — get this — canada called inslaw one day looking for user manuals . problem was , inslaw had never sold it to canada . i’m sure an awkward pause ensued… )
the doj agreed to these conditions , but requested inslaw prove it had indeed created enhanced promis with private funds . inslaw said it would , and the enhanced software was given to the doj .
for over 42 years , new generations of inslaw software have kept pace with changing customer needs .
entity tags : us department of justice , inslaw , inc . , elliot richardson , richard thornburgh
entity tags : idateasiapi , house judiciary committee , inslaw , inc . , us department of justice
entity tags : inslaw , inc . , c . madison “brick” brewer , us department of justice
entity tags : c . madison “brick” brewer , us department of justice , inslaw , inc .
entity tags : harvey sherzer , inslaw , inc . , peter videnieks , us department of justice
disputed software in escrow , so that if inslaw went bankrupt , then the government would receive the enhanced software and its interest would still be protected . doj rejected inslaw ' s escrow proposal .
relief must be available to inslaw under the bankruptcy code ' s broad provisions waiving sovereign immunity .
lawyers for inslaw have alleged that cornelius blackshear , a former u . s . trustee , lied in sworn depositions when questioned about an attempt to force inslaw ' s liquidation , sources said .
[ emphasis supplied . ] order of december 2 , 1986 , inslaw exhibit no . 11 .
` ` preposterous ` ` ; and jensen has questioned the quality of inslaw ` s product .
by february 1985 , the government had withheld payment of almost $ 1 . 8 million for inslaw ' s implementation services , plus millions of dollars in old promis license fees . inslaw filed for
the doj began withholding payments to inslaw in 1983 , a month after inslaw’s owners had refused to sell the company to a friend of the attorney general , and a year after inslaw had demonstrated the software to the fbi for use as their new case management software .
[ 2 ]
this summer , inslaw signed an deal with ibm under which the computer giant agreed to loan the company $ 1 . 5 million to help fund inslaw ' s emergence from chapter 11 and an additional $ 1 million to make enhancements to ibm ' s version of inslaw software , hamilton said .
inslaw ' s owners , william and nancy hamilton , and his chief lawyer , former attorney general eliot richardson , charge that the effort to destroy inslaw was engineered by senior reagan administration officials , and their friends and associates , to reap millions of dollars from sale of inslaw ' s software .
inslaw chairman william a . hamilton and inslaw ' s trial attorneys at mcdermott , will & emery and its bankruptcy attorneys at docter , docter & salus also declined comment on bason ' s removal .
inslaw did not learn the identity of the federal customer for another decade . in 2006 , a retired senior counsel from the software ag reston subsidiary confirmed to inslaw that the customer was the fbi .
united states of america and the united states department of justice , appellants , v . inslaw , inc . , appellee . in re inslaw , inc . , debtor . inslaw , inc . , plaintiff , v . united states of america , and the united states department of justice , defendants .
in march 1982 , inslaw was awarded a contract by doj to implement and install enhanced promis in various united states attorneys offices . inslaw alleges that , commencing almost immediately and continuing throughout its contract performance , inslaw was subjected to harassment by doj ; that disputes arose , none of which were resolved ; and that doj ultimately terminated a portion of its contract with inslaw for the convenience of the government .
in august 1984 , at & t signed a contract with inslaw to loan the company technical help to create software products for at & t computers . but shortly after inslaw filed for chapter 11 bankruptcy protection in february 1985 , at & t stopped deliveries of equipment inslaw needed to perform its contract , according to court documents filed by inslaw . at & t then said that inslaw was
never realistically able to meet { the } milestones
set out in the contract , according to the filings .
entity tags : charles work , inslaw , inc . , public integrity section , us department of justice
promis inslaw clinton systematics fusiongps all related . . . is this the missing link ? , page 1
entity tags : inslaw , inc . , james rogers , joyce demy , latham , watkins & hills
entity tags : inslaw , inc . , house judiciary committee , arnold burns , us department of justice
management system , the contract between inslaw and justice quickly became embroiled in bitterness and controversy which has lasted for almost a decade . the conflict centers on the question of whether inslaw has ownership of its privately
56 b . r . at 1020 . inslaw is entitled to an opportunity to prove its claims .
it quickly became apparent that the successful prosecution of inslaw ' s claim against doj would be anything but a straightforward task ; the problem facing inslaw and ds & m was remarkably complex and multidimensional .
to force inslaw out of business so that it would be unable to seek restitution through the courts .
version originally specified in the contract . however , the government failed to negotiate the payment of license fees as promised , claiming that inslaw had failed to prove to the government ' s satisfaction that inslaw had developed the enhanced version with private , non - government funds and that the enhanced version was not otherwise required to be delivered to the government under any of its contracts with inslaw—that is , inslaw had provided it
the doj began withholding payments to inslaw in 1983 , a month after inslaw’s owners had refused to sell the company to a friend of the attorney general , and a year after inslaw had demonstrated the software to the fbi for use as their new case management software . as a result , inslaw was forced into bankruptcy , and eventually sued the u . s . government . the court ruled in inslaw’s favor , finding that the doj’s officials “took , converted and stole” the software through “trickery , fraud and deceit . ”
the bankruptcy court had ruled that by spreading unauthorized copies of inslaw ' s software and allegedly interfering with the company ' s affairs , the department had hindered inslaw ' s ability to reorganize under bankruptcy protection .
within several weeks of inslaw’s delivery of it , however , the executive office reneged on its commitment , and simultaneously began to withhold payments due inslaw under the contract , using newly - concocted sham contract disputes .
information i , rick conway and george brown gathered during the first month of ds & m ' s representation gradually developed to the point where it began to appear that doj ' s withholding of funds due inslaw and contesting of inslaw ' s ownership rights in its key product , namely ` enhanced promis , ' was a principal cause of inslaw ' s bankruptcy . further , you informed us that doj had had contacts with current or potential inslaw customers and either disparaged inslaw or intimated that doj would make enhanced promis available for free . motivation for doj ' s actions was unclear , but you stated that the presence of a fired inslaw employee as promis implementation contract manager for doj suggested an active and malicious bias against inslaw .
entity tags : bankruptcy court for the district of columbia , us department of justice , inslaw , inc .
entity tags : us department of justice , arnold burns , office of professional responsibility , inslaw , inc .
entity tags : h . lawrence wallace , inslaw , inc . , us department of justice , william hamilton
entity tags : janice a . sposato , harvey sherzer , us department of justice , inslaw , inc .
inslaw would deliver to the government all promis programs and supporting documentation developed for or relating to the contract .
between august 29 , 1983 and february 18 , 1985 , inslaw installed promis in all 20 u . s . attorneys ' offices as provided for under the contract . inslaw implemented the enhanced version of the software .
modification to the contract . while justice officials at the time recognized inslaw ' s proprietary rights to any privately
in re inslaw , inc . , 76 b . r . 224 ( d . c . 1987 )
in re inslaw , inc . , 97 b . r . 685 ( d . c . 1989 )
under a general retainer
of d . s . & m . by inslaw , as follows :
39 . despite the disastrous effect inslaw ' s application had on the relationship between attorney and client , d . s . & m . made the effort to have direct discussions with inslaw to clear the air .
bason ruled that brewer grew ' so consumed by hatred ' against inslaw and its president , william hamilton , that he systematically sabotaged inslaw ' s $ 10 million justice department contract and also ruined its other business .
murphy died suddenly about a week later . the george w . bush administration , especially deputy attorney general larry thompson , stonewalled inslaw counsel boyden gray , just as three earlier administrations had stonewalled inslaw counsel elliot richardson .
6 . also reserved for later determination , at the trial scheduled to begin on january 27 , 1988 , is inslaw ' s request for an injunction requiring doj to be bound by the terms and conditions of inslaw ' s standard license agreement with respect to each of those offices in which doj already has implemented the privately - funded enhanced version of promis , and requiring doj to compensate inslaw by paying to inslaw its standard license fee .
57 . on september 29 , 1988 , inslaw filed the instant objection [ p . 925 ] to the proof of claim filed by d . s . & m . for compensation as inslaw ' s special counsel .
united states of america , et al . , appellants , v . inslaw , inc . inslaw , inc . v . united states of america , et al . , appellants . inslaw , inc . v . united states of america , et al . , appellants . inslaw , inc . v . united states of america , et al . , appellants , 932 f . 2d 1467 ( d . c . cir . 1991 )
the latest ruling involves an epic legal battle between inslaw inc . , a washington computer software firm , and the government . two federal judges ruled previously that the justice department had stolen inslaw ' s valuable computer software .
as if things weren ' t getting hot enough for the federal bankruptcy court system , but now the inslaw case is becoming another watergate . inslaw was a washington , d . c . , based computer firm that sold a highly technical tracking software program to the u . s . department of justice . federal judges have upheld inslaw ' s contention that the justice department , under attorney general edwin meese , stole inslaw ' s computer program .
according to congressional and court documents , brewer and videnieks didn ' t tarry in their efforts to destroy inslaw . after inslaw ' s installation of public domain promis had begun , the doj claimed that inslaw , which was supporting the installation with its own computers running the enhanced version of promis , was on the brink of bankruptcy . although inslaw was contracted to provide only the public domain promis , the doj demanded that inslaw turn over the enhanced version of promis in case the company could not complete its contractual obligations . inslaw agreed to this contract modification , but on two conditions : that the doj recognize inslaw ' s proprietary rights to enhanced promis , and that the doj not distribute enhanced promis beyond the boundaries of the contract ( the 94 us attorney ' s offices . )
inslaw pioneered the use of advanced software engineering tools to customize application software to the specific requirements of each customer .
entity tags : us district court for the district of columbia , inslaw , inc . , us department of justice
entity tags : george bason , daniel casolaro , inslaw , inc . , randall davis , us department of justice
entity tags : elliot richardson , donald santarelli , inslaw , inc . , lowell jensen , us department of justice
entity tags : inslaw , inc . , latham , watkins & hills , roderick m . hills , william hamilton
the inslaw affair : this is a good collection of links to resources such as the house committee investigation report .
allegations against meese , others in collapse of software firm : u . s . probing possible perjury in inslaw case
when he announced his decision , bason rejected stanton ' s sworn denial of inslaw ' s allegation that he had asked blackshear to send his chief deputy to washington to convert inslaw ' s bankruptcy reorganization into a liquidation proceeding .
inslaw said that u . s . bankruptcy judge james schneider will convene a status conference on the case thursday .
the justice department agent responsible for making payments was a former , fired inslaw employee , c . madison brewer .
to advise him on the allegations that high - ranking officials had acted improperly for personal gain to bankrupt inslaw .
the u . s . government has never paid inslaw inc . for any of these unauthorized uses of promis .
` ` trickery , fraud and deceit ` ` to try to steal a software program that inslaw had developed .
in the meantime , inslaw also developed privately owned enhancements to promis . despite contractual guarantees of inslaw’s proprietary rights to the enhanced version of promis , the justice department essentially commandeered the improved program for its own uses without paying for it . inslaw was forced into bankruptcy and began an endless fight with the justice department to recoup its losses .
the inslaw software is used by federal prosecutors to track details of criminal cases . inslaw ' s president said use of the software was limited to only 42 offices of u . s . attorneys and one justice department division .
to force inslaw into liquidation for the express purpose of incapacitating the company from litigating the government’s theft of promis .
pursuant to the congressional reference resolution , inslaw sued the government in the court of federal claims in august 1995 .
united states of america , et al . , appellants , v . inslaw , inc . inslaw , inc . v . united states of america , et al . , appellants . inslaw , inc . v . united states of america , et al . , appellants . inslaw , inc . v . united states of america , et al . , appellants , 932 f . 2d 1467 ( d . c . cir . 1991 ) : : justia
the report concluded that the subcommittee found no proof for a broad conspiracy against inslaw within the doj , or a conspiracy between doj officials and outside parties to force inslaw into bankruptcy for personal benefit . however , it criticized doj for hiring a former inslaw employee ( brewer ) to oversee inslaw ' s contract with eousa , and for failing to follow standard procedures in handling inslaw ' s complaints . it also criticized the doj for a lack of cooperation with the subcommittee , which delayed the investigation and undercut the subcommittee ' s ability to interview department employees . [ 56 ]
inslaw ' s initial filing claimed that the contract disputes arose because the doj officials who administered the contract were biased against inslaw . [ 30 ] the filing specifically mentioned promis project manager , c . madison brewer , and associate attorney general , d . lowell jensen . brewer had previously been inslaw ' s general counsel , but according to inslaw had been terminated for cause . inslaw claimed that brewer ' s dismissal caused him to be unreasonably biased against inslaw and owner william hamilton . [ 31 ] jensen was a member of the project oversight committee at the time of the contract . he had helped to develop another competing case management software system several years earlier , and inslaw claimed that this led him to be prejudiced against promis , so that he ignored the unreasonable bias of brewer . [ 32 ]
in the final days of the carter administration , the leaa was phased out . inslaw had made a name for itself and hamilton wanted to stay in business , so he converted inslaw to a for - profit , private business . the new inslaw did not own the public domain version of promis because it had been developed with leaa funds . but because it had funded a major upgrade with its own money , inslaw did claim ownership of the enhanced promis .
the department withheld payment from inslaw after a series of contractual disputes with the company . inslaw eventually went bankrupt ; it charged in court that senior officials in the department stole the program and gave it their friends to sell abroad .
the democratic majority called upon attorney general dick thornburgh to compensate inslaw immediately for the harm that the government had
egregiously
inflicted on inslaw . the republican minority dissented and the committee divided along party lines 21–13 . [ 61 ]
it all began when associates of then attorney general edwin meese and dr . earl brian , a business associate of meese and also a cabinet officer under governor ronald reagan , attempted to buy a small computer software company called inslaw . inslaw had developed a highly sensitive program for tracking criminals - the software was called promis . inslaw had signed a $ 10 million contract with the u . s . justice department to develop the software under contract to them . inslaw was not paid for the program and it was told that if it didn ' t sell the company it would have problems - it did . when insiders at the justice department blocked payments to inslaw , those insiders included one fired employee of inslaw and one former competitor of the firm - inslaw was pushed into the bankruptcy courts . the justice department , according to evidence on file , pushed the bankruptcy court to declare inslaw insolvent . instead the bankruptcy court ruled that the justice department owed inslaw $ 6 . 8 million . the judge who made the ruling was removed from the bench .
welcome to inslaw , inc . - software you can grow with - case management software - modulaw , cjis , promise
entity tags : us department of justice , inslaw , inc . , us court of appeals for the district of columbia
entity tags : us department of justice , elliot richardson , inslaw , inc . , public integrity section , richard thornburgh
entity tags : inslaw , inc . , frank mallgrave , executive office for us attorneys ( doj ) , laurence mcwhorter
entity tags : us department of justice , house judiciary committee , inslaw , inc . , systems architects , inc .
entity tags : inslaw , inc . , dean merrill , john gizarelli , c . madison “brick” brewer , william hamilton
in re inslaw , inc . , 88 b . r . 484 ( d . d . c . 1988 )
in the meantime , inslaw also developed privately - owned enhancements to promis . despite contractual guarantees of inslaw ` s proprietary rights to the enhanced version of promis , the justice department essentially commandeered the improved program for its own uses without paying for it . inslaw was forced into bankruptcy and began an endless fight with the justice department to recoup its losses .
37 . the request for a meeting was made by inslaw without advance notice to d . s . & m .
the government then unsuccessfully attempted to force inslaw into liquidation , rather than allow a financial reorganization , the judge said .
in re inslaw , inc . , 76 b . r . 224 ( d . d . c . 1987 )
finally , the committee stated that the department of justice had obstructed its investigation of the inslaw affair and its access to witnesses and documents , and noted justice had similarly obstructed an earlier inslaw affair investigation by the senate permanent investigations subcommittee .
staff study of allegations pertaining to the department of justice ' s handling of a contract with inslaw , inc . /
and , separately , by inslaw’s litigation counsel , to identify its federal government customer , the reston software ag subsidiary declined to answer . the erroneous pre - trial ruling precluded inslaw from using the authority of the court to compel an answer .
following the liquidation of leaa , however , offices wishing to acquire promis would need to pay license fees to the new for - profit inslaw , inc . the people financing the new for - profit inslaw , including the hamiltons , sought confirmation in advance that justice understood and agreed with the need for the new for - profit inslaw to charge promis license fees .
who : bill hamilton and his wife , nancy hamilton , start inslaw to nurture promis ( prosecutors management information systems ) .
entity tags : inslaw , inc . , frank hunger , christine miller , court of federal claims , us department of justice
entity tags : william hamilton , inslaw , inc . , house judiciary committee , john gizarelli , c . madison “brick” brewer
entity tags : us department of justice , william hamilton , arnold burns , inslaw , inc . , stanley e . morris
entity tags : inslaw , inc . , earl brian , reagan administration , sct , william hamilton , allen & co .
entity tags : edwin meese , inslaw , inc . , lowell jensen , us department of justice , office of professional responsibility
( 1 ) a declaratory judgment in favor of inslaw that it is the sole owner of the proprietary enhancements to promis .
[ 19 ] department of transportation contract appeals board , the administrative agency with jurisdiction over contract disputes between inslaw and doj .
allegations against meese , others in collapse of software firm : u . s . probing possible perjury in inslaw case - latimes
1 . the instant chapter 11 bankruptcy case of inslaw , inc . [
inslaw
] was commenced by its filing of a voluntary petition in the u . s . bankruptcy court for the district of columbia on february 7 , 1985 .
in april inslaw received overtures from another company about a possible purchase of inslaw . corporate counsel neil lefkowitz and rebecca wright , in conjunction with garr , conway and me analyzed the parameters of the offer and its effect on the prospective litigation .
42 . the meeting with judge bason was cancelled and d . s . & m . continued its representation of inslaw .
inslaw developed a computer software program used by justice department lawyers and federal prosecutors . at the center of the case was c . madison brewer - - fired by inslaw but who later supervised his former employer ' s contract with the justice department .
hamilton said inslaw ' s lost profits now total some $ 300 million , with legal fees now exceeding $ 6 million .
the company that made the attempt to buy inslaw had financial connections to meese and some of meese ' s cronies . when the battle ended , inslaw was broke , an attorney , a justice department whistle - blower and a judge were out to work , but inslaw was saved by a corporate giant , ibm , who rescued the company virtually from the auction block .
identification of the customer would have provided current proof of a then - ongoing federal government infringement of inslaw’s promis copyright rights .
on the new allegations brought by inslaw , although the committee conducted extensive investigations , the report did not make any factual findings on the allegations , it did conclude that further investigation was warranted into the statements and claims of inslaw ' s witnesses .
report of special counsel nicholas j . bua to the attorney general of the united states regarding the allegations of inslaw , inc
rivenbark , leigh ( 1988 - 10 - 03 ) .
inslaw responds to doj appeal amid lengthy court delays
.
( i ) contrary to the government ' s argument , the first amendment does not bar this court from issuing an injunction to halt doj ' s claimed disparagement of inslaw ' s product . a demonstration of such disparagement would establish a violation of the automatic stay . inslaw has alleged that actions of the government which disparaged inslaw ' s product have caused inslaw grievous injury , and this court must accept those allegations as true for purposes of the motion to dismiss . the government ' s reliance upon
inslaw seeks relief against utilization of its claimed property by the government without just compensation . it is inslaw ' s simple assertion that doj should make up its mind which if any of the enhancements to promis it wishes to keep and utilize , pay for its use of inslaw ' s enhancements , and stop using enhancements if it is not willing to pay for such use .
at & t was initially represented as a creditor in the proceedings by a new jersey lawyer whom inslaw alleges worked against the company ' s efforts to maintain financial solvency and
may have aided the unlawful effort of the doj to liquidate inslaw .
inslaw has sent the office of public integrity a lengthy memo on the case , which includes an allegation that meese may have had a role in the ouster of an attorney who was working for inslaw . but the office has declined to investigate meese .
one month later , the u . s . government began to find fault with some of inslaw ' s services , and with negotiated billing rates . the government then began to withhold unilaterally each month increasing amounts of payments due inslaw for implementation services .
according to affidavits filed by william hamilton , as the contract details were modified , hamilton then received a phone call from dominic laiti , chief executive of hadron . laiti wanted to buy inslaw . hamilton refused . according to hamilton ' s affidavits , laiti then warned him that hadron had friends in government and if inslaw did not want to sell willingly , inslaw could be coerced .
entity tags : william bryant , us department of justice , inslaw , inc . , us district court for the district of columbia
for the relief of inslaw , inc . , a delaware corporation , and william a . hamilton and nancy hamilton , individually .
at & t , however , has said it was not trying to scuttle inslaw .
we deny that there is any substance to inslaw ' s allegations that at & t engaged in any improper conduct ,
said at & t spokesman herb linnen .
teel declined to comment on his appointment , bason ' s removal , or whether teel would recuse himself from the inslaw case .
the complicated inslaw case began when inslaw filed for bankruptcy protection three years ago . it then alleged that department of justice officials drove it into filing for chapter 11 protection by unfairly stopping payment on a contract inslaw had to develop a computer software program called promis that was used to track cases in u . s . attorney ' s offices . it also alleged that the department attempted to stop the company from selling the software to other customers by claiming that the program belonged to the government , rather than inslaw .
following the israeli meeting , the justice department obtained inslaw ' s new , 32 - bit , enhanced promis from inslaw at the start of the second year of their implementation contract by modifying that contract and by promising to negotiate the payment of license fees .
to compensate inslaw immediately for the harm that the government had
egregiously
inflicted on inslaw . the republican minority dissented . the committee was divided along party lines 21–13 . attorney general thornburgh ignored the recommendations , and reneged on agreements made with the committee .
the inslaw case is still under congressional investigation . the justice department has adamantly refused to cooperate with congressman jack brook ' s committee . one justice department official has told a senate committee investigator , that inslaw is dirty and far deeper than watergate ever was .
the growing inslaw software theft is now reaching foreign proportions . while the u . s . house judiciary committee is investigating the theft of inslaw ' s promis software by the u . s . justice department , the canadian parliament will commence its own investigation .
a lawyer acting for inslaw warns the justice department that the department’s use of the enhanced version of promis software contravenes bankruptcy legislation . inslaw , in chapter 11 bankruptcy due to a dispute between itself and the department ( see february 1985 ) , writes to the department’s contracting officer saying that the software’s use without inslaw’s consent and the payment of licensing fees would contravene inslaw’s property rights and its rights as a debtor in possession of the software under the bankruptcy code . in addition , inslaw argues it is “a wrongful exercise of control over property of the debtor’s estate in violation of the automatic stay now in effect . ” the automatic stay is a legal mechanism that prevents creditors—such as the justice department—harassing a debtor—such as inslaw—in bankruptcy . inslaw also says that the department’s dissemination of the software to third parties could damage or destroy the product’s commercial value , possibly wrecking the company . ( us congress 9 / 10 / 1992 )
on february 7 , 1985 , shortly before completing the contract with the justice department , inslaw filed for reorganization under chapter 11 of the bankruptcy code . from the outset of the proceedings in the bankruptcy court , doj represented itself as a major creditor of inslaw .
35 . when inslaw was notified that mr . ratiner was leaving d . s . & m . , inslaw filed an application [ p . 425 ] on november 19 , 1986 , requesting an in - chambers hearing . the application contained the following statements :
the inslaw case is becoming another watergate and involves former attorney general edwin meese , a federal judge , several high officials of the u . s . department of justice and even former white house aide robert c . mcfarlane , who transferred inslaw software to israel .
a lawyer acting for inslaw warns the justice department that the department’s use of the enhanced version of promis software contravenes bankruptcy legislation . inslaw , in chapter 11 bankruptcy due to a dispute between itself and the department ( see february 1985 ) , writes to the department’s contracting officer saying that the software’s use without inslaw’s consent and the payment of licensing fees would contravene inslaw’s property rights and its rights as a debtor in possession of the software under the bankruptcy code . in addition , inslaw argues it is “a wrongful exercise of control over property of the debtor’s estate in violation of the automatic stay now in effect . ” the automatic stay is a legal mechanism that prevents creditors—such as the justice department—harassing a debtor—such as inslaw—in bankruptcy . inslaw also says that the department’s dissemination of the software to third parties could damage or destroy the product’s commercial value , possibly wrecking the company . [ us congress , 9 / 10 / 1992 ]
inslaw inc . is a computer software company based in washington , dc , owned by william and nancy hamilton . inslaw markets case management software to courts and related justice agencies , to the insurance industry , to large law firms , and to the law departments of corporations . inslaw ' s principal asset is a highly sophisticated software program called promis , a computer program which manages large amounts of information
inslaw v . the united states , no . 95 338 x , 48 c . f . r . § 3 . 101 1
inslaw attorney elliot richardson issued a statement saying ,
what i have seen of [ the report ] is remarkable both for its credulity in accepting at face value denials of complicity in wrongdoing against inslaw and for its failure to pursue leads making those denials implausible .
richardson has sometimes suggested that one think of inslaw as three cases - - all of which may be related
concentric circles .
entity tags : us department of justice , house judiciary committee , c . madison “brick” brewer , peter videnieks , inslaw , inc .
in re inslaw , inc . , 88 b . r . 484 ( d . d . c . 1988 ) : : justia
10 . as a proximate result of rugh ' s call to mckain , inslaw ' s executives had to spend time calming mckain and overcoming his concern that he would be unemployed within 30 to 60 days , since he had earlier been led to believe by inslaw and its counsel that the chapter 11 process would likely extend for months , if not years , during which time inslaw would be able to continue operating its business . also , inslaw ' s executives had to spend time assuring that other employees did not become similarly alarmed . finally , inslaw had to incur legal fees and expenses attributable to efforts by its counsel to investigate and dispute rugh ' s claim .
505 f . 2d 1304 ( 5th cir . 1974 ) . the court left for a later hearing the precise amount due inslaw .
bason ruled that the villain was a fired inslaw employee who went to work for the justice department with a consuming desire for revenge .
schneider also will review inslaw ' s plan for bankruptcy reorganization , which includes a joint marketing agreement signed with international business machines corp .
meanwhile , inslaw ' s problems with the justice department continue to be scrutinized on capitol hill by the senate permanent subcommittee on investigations .
this will confirm our understanding regarding retention of this firm by inslaw to engage in litigation on its behalf against the united states government .
at the hearing on confirmation , d . s . & m . voted to confirm inslaw ' s third amended plan of reorganization .
his replacement , s . martin teel , took over shortly after judge bason announced his oral findings of malfeasance against inslaw by the justice department ; teel had been the justice department tax division attorney who had argued unsuccessfully before judge bason for the forced liquidation of inslaw .
inslaw never sold its software to canada , iraq , israel , the central intelligence agency or the national security agency . it also has not been paid by the justice department for its use , despite the $ 6 . 8 million ruling in inslaw ' s favor .
in re inslaw , inc . , 76 b . r . 224 ( d . d . c . 1987 ) : : justia
inslaw’s plans for selling new commercial versions of promis would not have affected the promis implementation contract with the executive office because that contract was , as already noted , to implement an earlier generation of promis that had already been licensed to u . s . attorneys offices . it took a decade for inslaw to begin to understand why the executive office had been so unalterably opposed in 1982 to inslaw’s plans :
senate investigators found no proof for any of these claims . their report noted that the bankruptcy court ruling had not concluded that jensen had engaged in a conspiracy against inslaw and that their own investigation had found no proof that jensen and meese had conspired to ruin inslaw or steal its product , or that brian or hadron were involved in a conspiracy to undermine inslaw and acquire its assets . [ 55 ]
‘ ( 3 ) mr . brewer’s attitude toward inslaw , combined with mr . videnieks’ harsh contract philosophy , led to the rapid deterioration of relations between the department and inslaw . any semblance of fairness by key department officials toward inslaw quickly evaporated when mr . hamilton attempted to protect his companies’ proprietary rights to a privately funded enhanced version of the promis software . in a highly unusual move , mr . brewer recommended just 1 month after the contract was signed that inslaw be terminated for convenience of the government even though inslaw was performing under the contract . from that point forward there is no indication that mr . brewer or mr . videnieks ever deviated from their plan to harm inslaw . the actions taken by messrs . brewer and videnieks were done with the full knowledge and support of high level department officials .
inslaw attributed its troubles to an acute bias on the part of brewer , who according to it was intent on running the company out of business . inslaw lodged many complaints of bias and made several requests of doj to investigate these complaints and give some relief from what it perceived to be grossly unfair treatment . doj made no meaningful response to these complaints , and inslaw ' s fortunes did not change .
once the software was in the possession of doj , there is no evidence that the government ever negotiated in good faith over the existence of the proprietary enhancements claimed by inslaw . the doj put the entire onus of proof on inslaw , yet never indicated what methodology or proof would be acceptable . the contract entered into by the parties entitled the government to the version of promis then in the public domain . the expert witnesses demonstrate that inslaw did enhance the software with private funds . the contract did not entitle doj to these enhancements . by failing to acknowledge or accept inslaw ' s claims , the government continued its fraudulent behavior toward inslaw . this behavior persisted long after inslaw filed for reorganization . doj ' s actions constitute a violation of the automatic stay by exercising control over property that rightfully belonged to the estate .
inslaw ' s accounting firm , arthur young , has reported inslaw had income of nearly $ 871 , 000 on revenue of $ 4 . 5 million for the year ended june 30 . the company ' s legal expenses , however , totaled $ 3 . 6 million .
it took a lot of gumption
for bason to rule as he did on the inslaw case , the lawyer said .
i ' m frankly concerned as to whether or not there could be any relationship
between bason ' s removal and the inslaw ruling .
that is how deep the inslaw computer software case has become . the case started out when the justice department bought promis , a copyrighted software program that helps to track criminal cases throughout the united states . when friends and associates of then attorney general edwin meese attempted to buy the software company , inslaw turned them down and then life was made miserable for inslaw . within 90 days the justice department reneged on their contract with inslaw and refused to pay for the software program , even though it was using it . the justice department is accused by federal judges of attempting to bankrupt inslaw and then hasten the bankruptcy court to declare them insolvent . instead , the courts ruled that the justice department used
fraud , deceit and trickery
against inslaw and awarded the small computer software company $ 6 . 8 million in damages .
entity tags : house judiciary committee , inslaw , inc . , us court of appeals for the district of columbia , us department of justice
entity tags : us department of justice , inslaw , inc . , elliot richardson , charles work , jay b . stephens , lowell jensen
entity tags : us department of justice , office of professional responsibility , david bobzein , inslaw , inc . , lowell jensen , robert lyon
‘ ( 9 ) the department’s response to inslaw’s requests for investigations by an independent counsel and the public integrity section was cursory and incomplete .
2 . during the course of the promis contract , a number of disputes developed between inslaw and doj . while the disputes were pending , and prior to the conclusion of the contract , inslaw filed a petition under chapter 11 of the bankruptcy code on february 7 , 1985 .
in march 1982 , the justice department awarded inslaw , inc . , a $ 10 million , 3 - year contract to implement the public
william barr appointed special counsel , nicholas j . bua , to advise him on what had become known by 1991 as the inslaw affair .
inslaw v . the united states , no . 95 - 338x , 48 c . f . r . § 3 . 101 - 1
all 21 democratic members of the judiciary committee voted last month to ask mr . barr to name a special counsel in the inslaw affair .
in the past , democrats on the committee have been critical of the department ' s handling of inslaw , but the report represented a sharp escalation of the nearly decade - old dispute between the justice department and inslaw ' s owners , william hamilton and his wife , nancy .
at approximately the same time , murphy privately told hamilton his hypothesis about cia director tenet’s abrupt reversal in march 2001 on settling with inslaw .
the doj response to inslaw was to emphasize that the implementation contract called for a version of promis in which the government had unlimited rights and to ask for information about the enhancements inslaw claimed as proprietary . [ 20 ] inslaw agreed to provide this information , but noted that it would be difficult to remove the enhancements from the time - sharing version of promis and offered to provide the vax version of promis if the doj would agree to limit their distribution . [ 21 ] in march 1983 , the doj again informed inslaw that the implementation contract required inslaw to produce software in which the government had unlimited rights , and that delivery of software with restrictions would not satisfy the contract . [ 22 ]
last year , bason accepted inslaw ' s contention that thomas j . stanton , head of the executive office of u . s . trustees , also tried to pressure blackshear into helping liquidate inslaw ' s assets - - a move that would have put the company out of business .
23 . inslaw agreed to the withdrawal of d . s . & m . as special counsel , based upon a mutual loss of confidence . because the withdrawal of d . s . & m . was consensual , inslaw cannot now be heard to complain that it was abandoned .
a second affidavit states that the inslaw software is being used in some 900 offices of the royal canadian mounted police , and in another ' as yet unidentified agency or department . ' that affidavit is by patricia hamilton , daughter of inslaw ' s owners , william and nancy hamilton .
further ordered that inslaw , inc . ' s request for an order prohibiting the united states department of justice from filing a proof of claim in the inslaw , inc . bankruptcy be and hereby is denied at this time , without prejudice to inslaw , inc . ' s right to object to or request equitable subordination of any such claim that the united states department of justice may hereafter file or otherwise assert ; and it is
in an effort to respond to the justice department ' s alleged concern over its financial viability , inslaw first offered to provide the justice department with enhanced promis if the government would agree to limit its distribution to the 94 u . s . attorneys ' offices and the eousa . the government , however , insisted that under its contract , inslaw must provide software without restriction on distribution . inslaw then offered to put copies of the


a stable value fund is a type of investment available in 401 ( k ) plans and other defined contribution plans as well as some 529 or tuition assistance plans .

stable value funds are often made available in these plans under a name that intends to describe the nature of the fund ( such as capital preservation fund , fixed-interest fund , capital accumulation fund , principal protection fund , guaranteed fund , preservation fund , or income fund among others ) .

they offer principal preservation , predictable returns , and a rate higher than similar options without proportionately increasing risk .

the funds are structured in various ways , but in general they are composed of high quality , diversified fixed income portfolios that are protected against interest rate volatility by contracts from banks and insurance companies .

for example , a stable value fund may hold highly rated government or corporate debt , asset-backed securities , residential and commercial mortgage-backed securities , and cash equivalents .

stable value funds are designed to preserve principal while providing steady , positive returns , and are considered one of the lowest risk investment options offered in 401 ( k ) plans .

stable value funds have recently been returning an annualized average of 2.72 % as of october 2014 , higher than the 0.08 % offered by money-market funds , and are offered in 165,000 retirement plans .

stable value fund

the battelle stable value fund seeks to provide current and stable income , while maintaining a stable share value of $ 1 .
separately managed stable value fund for larger plans seeking to create a diversified portfolio .
the mellon stable value fund has not veered from the standard 12 - month exit provision .
should you favor a stable - value fund over an intermediate - term mutual fund ? conservative investors may prefer stable value . but those who can tolerate some risk could choose intermediate funds - - or perhaps hold a mix of stable value and intermediate funds .
stable value funds remain popular options in many defined contribution plans . a recent vanguard study indicates that 57 % of defined contribution plans offer a stable value fund .
primarily , stable value fund investors should look for the fund that doesn ' t cost too much . generally a fairly priced stable value fund will charge fees of less than 0 . 50 % . be wary of stable value funds charging 1 % or more . you have to weigh the cost against benefit .
i blurted the answer before she could say it : “they all went into one fund … and it was the stable - value fund . ”
the stable - value fund at megacorp is currently paying about 2 . 3 % . here is some performance data versus the bond index fund :
stable value funds can provide value to your 401 ( k ) . ( c ) samxmeg / getty images
stable value funds attempt to maintain a stable share price , but the assets underlying the fund vary as interest rates , prepayment behavior and credit spreads change . there is almost always a difference between the book value of the assets , expressed by the nav , and the market value . when the stable value fund has a higher market value than book value , typically it pays an above market yield .
a stable value pooled fund manager may need up to 12 months’ notice before implementation of a re - enrollment .
plan has investment options in mutual funds and they also have a stable value fund option . the mutual funds are offered through one of the large mutual fund companies and the stable value fund is managed by a separate investment company . the company that manages the stable value fund does not file as a dfe . this stable value fund used to be invested totally in a gic from 1 large insurance company . that insurance company provided sch . a info and everything was fine . during the plan year the gic assets were transferred to this other investment company and the fund became the stable value fund , which has investments in a number of different gic ' s and other stable assets .
while most stable value options seek to preserve capital and provide competitive returns , there are significant differences among the most common stable value options — guaranteed insurance accounts ( i . e . , lincoln stable value ) and collective investment trusts . an important part of the stable value selection process is understanding these differences and working with stable value providers who have experience and success managing stable value assets through varying market conditions . watch this video to learn more !
stable value funds represent 12 % of all dc plan assets , and are in almost 50 % of all dc plans¹ . however , stable value funds are the least understood and evaluated fund in an investment lineup . stable value navigator allows for the side - by - side evaluation of up to eight funds , providing a detailed comparative analysis of most stable value offerings . stable value navigator assists advisors in performing an in - depth analysis of stable value funds , and adds unique value to what an advisor provides plan sponsor clients .
with a yield that high , i ' d consider the stable value fund a legitimate part of your fixed income allocation . when i held a similar equity allocation to yours , with a minimum 3 % yield on our stable value fund , i evenly split my 30 % fixed income allocation between total bond market , lt tips , and the stable value fund .
an equity fund is a type of fund that uses investors ' capital . . .
a mutual fund wrap , also known as a mutual fund advisory program . . .
12 % intermediate treasuries 5 . 25 yrs duration avg 9 % tips fund duration 8 . 1 yrs 7 % stable value
all investments have risks , however stable value works to minimize risk wherever possible .
select the stable value investment option best suited to the needs of your plan .
55 stable value product profiles available , more to be added by advisor request .
i ' m actually blown away that you ' re getting
near 3 % returns
with your stable value fund . we recently solicited offers for stable value funds for our dc plan and they best we could find was 2 . 25 % with voya . may i ask whom your company uses for your stable value fund ?
the 401k has a variety of equity mutual funds , a mm ( money market ) fund , and a bond fund . the forbidden trade is from the stable value fund into the mm fund . transferring into the bond fund ( intermediate term ) or the equity funds is ok , but money transferred must remain there 90 days before going into the mm fund . you can ' t do a direct transfer from the stable value fund to the mm fund without going through one of the other aforementioned funds for 90 days .
you should also try to educate yourself about how fund withdrawals or redemptions work . participants in stable value funds are not subject to any waiting periods of surrender charges . but there may be a provision that prevents you from moving funds from a stable value fund to a competing fund , or a short - term bond fund or money market fund . you may have to wait 90 days .
fees on stable value funds do tend to be higher , especially compared to an index fund of anything , bonds or stocks .
yes , stable value investment options , investment contracts , investment managers , and other service providers such as insurance companies involved in stable value have multiple layers of regulatory oversight .
i just checked my 401 ( k ) stable value fund restrictions . you ' re right . amounts that are transferred out of a stable value account must remain in another fund before transfer into a self - managed account for 90 days . to take a guess , it must have something to do with the insurance contract obligations for stable value funds . i ' ll wait for the experts to answer . new wiki page : please see stable value fund on the bogleheads wiki .
all my bonds - high - yield and munis - have had a negative return this year , but not the stable value fund .
a stable value fund is a conservative fund investment , kind of like a money market fund . yet stable value funds are known to offer slightly higher yields than money markets , without too much additional risk . a stable value fund is an investment known for preservation of capital . in other words , the funds retain the value of your cash , regardless of what the stock or bond markets are doing . it ' s low risk , but the return you get is low as well .
the stable value fund that i had in my old 401k did not have any restrictions on it . that ' s the one fund i really miss since my rollover to vg .
ladygeek wrote : i just checked my 401 ( k ) stable value fund restrictions . you ' re right . amounts that are transferred out of a stable value account must remain in another fund before transfer into a self - managed account for 90 days . to take a guess , it must have something to do with the insurance contract obligations for stable value funds . i ' ll wait for the experts to answer . new wiki page : please see stable value fund on the bogleheads wiki .
a stable value fund may seem like mutual funds , but they are structured and managed slightly differently . they come in a few types :
there ' s a trade - off for stable value ' s money market beating yields .
according to the stable value investment association , approximately $ 821 billion is invested in stable value funds , or almost 12 % of the estimated $ 7 trillion in retirement plan assets .
there are two main types of stable value funds : collective investment trusts and direct contracts .
comparison of lincoln stable value ( a guaranteed insurance account ) vs . typical collective investment trust
choosing the right stable value manager is critical to helping your participants achieve their target outcomes .
even with this protection , stable value funds aren ' t always successful in their efforts to preserve principal . defaults in the underlying bonds can fall outside the contractual guidelines that protect principal value , as can corporate events such as layoffs or early retirement programs that create a run on the assets of the stable value fund . often , however , the stable value fund will work with the 401 ( k ) plan sponsor to anticipate corporate events that could destabilize the fund .
of the employers that changed or replaced their money fund , nearly 13 % added a stable value fund and 61 % adopted government money funds , which were not affected by the rule changes .
z3r0c00l wrote : fees on stable value funds do tend to be higher , especially compared to an index fund of anything , bonds or stocks .
closed - end funds have a fixed number of fund units during the tenor specified in the fund contract . fund units may be traded on lawfully organized stock exchanges , but fund unit holders are not allowed to apply for early redemption of their fund units .
in stable value investing , gics and wraps are essentially two of several types of investment contracts .
stable value investment options do not exist in publically available investment vehicles , such as mutual funds .
1 svia investment & policy survey for 2016 , stable value investment association , 2016 , urltoken .
in those cases , the oversized helpings of stable value are common — and that’s a problem .
ordinarily , the restriction is required and elaborated by the manager of the stable value fund . the reason mmfs in particular are singled out is to prevent investors from moving their money from a stable value fund to a mmf during times of rising interest rates when the yield on a mmf will increase at a faster rate than the yeild from a stable value fund due to the duration of each fund ' s holdings . a large movement of money from one to the other would result in the stable value fund having to liquidate assets to honor redemptions to the detriment of the fund and those who remain with it . the purpose of requiring investors to move their money to bond funds or stock funds for a 90 day window is to force participants to put their money
at risk
prior to gaming the spread between a stable value fund and a short term fixed income fund , i . e . mmf .
helot wrote : ordinarily , the restriction is required and elaborated by the manager of the stable value fund . the reason mmfs in particular are singled out is to prevent investors from moving their money from a stable value fund to a mmf during times of rising interest rates when the yield on a mmf will increase at a faster rate than the yeild from a stable value fund due to the duration of each fund ' s holdings . a large movement of money from one to the other would result in the stable value fund having to liquidate assets to honor redemptions to the detriment of the fund and those who remain with it . the purpose of requiring investors to move their money to bond funds or stock funds for a 90 day window is to force participants to put their money
at risk
prior to gaming the spread between a stable value fund and a short term fixed income fund , i . e . mmf .
in europe , a number of companies are employing the
reverse distribution mechanism
in order to keep the fund ' s net asset value at $ 1 a share . this involves canceling shares in the fund in order keep the net asset value stable .
to that point , 65 percent of u . s . retirement plans offer a stable - value fund , according to callan associates , an investment manager .
now on the doorstep of retirement , i keep about 24 % of the 56 / 44 portfolio in a 2 . 7 % stable value fund , with 20 % of the portfolio equal to 5 years ' worth of withdrawals , and the stable value fund constituting a ( practically ) risk - free holding .
stable value funds are usually found in 401 ( k ) plans . image source : getty images .
the october rule was an additional boost for stable value , but stable value had already been mostly favored relative to money markets as an option on a dc plan ,
mr . karam said .
many participants embrace stable value for their conservative allocations and as a refuge in times of market volatility .
following the credit crisis of 2008 a number of fi ms exited the stable value market . standish’s conservative investment approach and innovative solutions have allowed it to be the respected stable value provider it is today .
our stable value management team has an average tenure of 15 years and 19 years of investment experience .
if an asset in a stable value fund defaults , the fund will likely temporarily suspend withdrawals while it pursues one or two courses of action . if the loss is small , they might buy a wrap contract for the loss , which will haircut the yield on the stable value fund for the life of the wrap contract . if the loss is big , they will reduce the nav , and attempt to keep the nav stable from there . given the history of money market funds breaking the buck , it is possible that the fund manager might pony up the funds to make the stable value fund whole , but i wouldn’t rely on that .
risk associated with stable value fund ? ? i seldom hear any discussion of the risks of stable value fund , namely the ability of the issue to pay . there ' s no fdic coverage or even implicit promise by any government agency to protect investors in stable value funds . i would do a lot of due diligence on the insurance company standing behind these plans . black swan events aren ' t expected but do happen .
my vote : stable value , and if the risk / return tradeoff changes consider switching to intermediate bond .
make sure you check the fees before making a decision . but , with no other information , 2 % sounds really good for a stable value fund right now .
my stable value fund in the 457b currently pays 2 . 75 % . i ' ll take it . it is composed of approx . 65 % voya stabilizer and 35 % prudential guaranteed long term fund ( whatever these are .
because of regulatory rules , stable value as an asset class is not available in either iras or taxable accounts .
definity would use stable value in this current interest rate environment . you can always switch to bond funds later .
there is a risk that in an environment where interest rates have risen sharply , that a stable value fund would have a lower market value than book value , with a below market yield . in a situation like this , particularly when the yield curve inverts , there is a risk that shareholders in the stable value fund will leave in search of higher yields . if that happens to a high degree , it will worsen the gap between the market value and book value of assets , which will be covered by the wrappers in the short run , but will reduce the fund’s yield as they pay the wrappers back .
while stable value has its share of issues when you stack it up against other fixed - income options in a 401 ( k ) , it still comes out on top ,
says chris tobe of stable value consultants .
an equity wash is a contractual provision in a stable value investment option that requires any transfer a participant makes from the stable value investment option to a competing option to first be directed to any other investment option for a period .
it’s important for consultants to highlight that an insurance company’s guaranteed insurance stable value fund can provide safety , liquidity and yield when discussing defined contribution investment options . for clients that have employees looking for stable investment options as part of their retirement planning , guaranteed insurance stable value funds can serve as a more conservative product offering to help protect plan participants’ savings .
note that stable value funds are mostly available only in 401 ( k ) s . so if you switch jobs or retire , rather than rolling all your money into an individual retirement account , you may want to leave some in your old employer ' s plan to maintain access to a stable value , says kelli hueler , whose hueler cos . tracks stable value fund performance . retirees often miss that opportunity , she adds ,
because many financial advisors aren ' t aware of all the benefits of stable value .
my 401 ( k ) plan has a stable value fund that currently pays a preannounced annual rate of 5 . 30 percent . the fund enters into guaranteed investment contracts ( gics ) with insurance companies which invest in government and corporate bonds and mortgages . i’ve heard that stable value funds can now be purchased outside of retirement plans . does anyone know of any fund families or brokers that offer these funds to individual investors ?
more than 13 % of the $ 5 . 2 trillion in dc plans is invested in stable value funds . 4
invesco is in a select group of managers with extensive stable value expertise and large fixed income scale . with experience in this asset class since 1985 , invesco is one of the largest and most experienced stable value managers in the country .
most young investors should only hold a small allocation to stable value funds , cautions winfield evens , director of investment strategy for consultant aon hewitt ' s defined contribution unit .
it may make sense to keep a fraction of your money in a stable value fund and away from market risk ,
says evens .
but over 20 or 30 years , stable value investments may not keep pace with inflation .
others have switched to a plan sponsor termination provision , where the plan receives the lesser of market value or book value at the time of withdrawal — a risky proposition for a plan sponsor trying to maintain a stable principal value .
while stable value funds provide book value coverage for participant - directed activity ( withdrawals , transfers , etc . ) , book value coverage is limited for distributions resulting from plan sponsor - directed events such as a re - enrollment .
linguini wrote : make sure you check the fees before making a decision . but , with no other information , 2 % sounds really good for a stable value fund right now .
dziuniek wrote : my stable value fund in the 457b currently pays 2 . 75 % . i ' ll take it . it is composed of approx . 65 % voya stabilizer and 35 % prudential guaranteed long term fund ( whatever these are .
over $ 821 billion is invested in stable value funds . approximately half of all 401 ( k ) plans offer a stable value fund and some 529 college savings plans also offer this conservative type of investment . the low risk nature of this type of investment provides stable , consistent returns that can help provide portfolios with additional diversification options in an overall asset allocation strategy .
that ' s comparing apples and oranges , as dodix is a bond fund , and bond funds do not have a stable value . dodix is an investment - grade bond fund , so maybe better to compare to other investment - grade bond funds .
in some key respects stable value funds resemble intermediate - term bond mutual funds . both kinds of funds invest in portfolios of bonds . when interest rates rise , the value of the bonds tends to fall . if that happens , a shareholder in a typical bond mutual fund could lose principal . in contrast , a saver who makes a withdrawal from a stable value fund would not suffer because the insurance contract protects against principal losses .
i too am of the opinion that stable value is a good proxy for a bond fund allocation . we have most of our non equities in stable value paying between about 3 % and 4 . 25 % . remember that part of the purpose of holding non equities is to preserve capital during a downturn .
stable value funds have diversified portfolios of fixed - income securities that closely resemble what you ' d find in a typical bond fund . however , stable value funds take an additional step to protect their investors from the interest rate fluctuations that so often cause traditional bond funds to suffer dramatic swings in their share price . specifically , stable value funds enter into contracts with banks or insurance companies that are specifically designed to offer rate protection .
an s & p global ratings principal stability fund rating ( psfr ) , also known as a
money market fund rating ,
is a forward - looking opinion about a fixed - income fund ' s capacity to maintain stable principal ( net asset value , or nav ) and to limit exposure to principal losses due to credit risk . when assigning a principal stability rating to a fund , s & p global ratings ' analysis focuses primarily on the creditworthiness of the fund ' s investments and counterparties , and also its investments ' maturity structure and management ' s ability and policies to maintain the fund ' s stable net asset value .
because they hold longer maturities with lower - quality issues , intermediate funds tend to yield about a half - percentage - point more than stable value funds . the extra yield should enable the intermediate funds to outperform stable value over the long term .
i invest 50 % in stable value , nice conservative way to keep your money intact while the other 50 % grows .
until stocks turned around a few weeks ago , just about every investment in your 401 ( k ) had let you down — except one . the so - called stable value fund has continued to deliver on its promise to combine the safety of a money market fund with the higher returns possible from an intermediate bond fund .
what i did was put a new column in the simba backtesting spreadsheet with historical data on my stable value fund ( tiaa - trad ) , and then used the spreadsheet ' s tool for exploring alternative portfolios . it didn ' t really change the overall picture very much . but it makes sense to use more accurate data for your stable value fund instead of using a proxy .
i have virtually all of my fixed allocation in a 3 . 46 % ( net of expenses ) stable value fund - - - - to me it is a
no brainer .
perhaps this is a better explanation
with all of that as a backdrop , let ' s look again at the objective of a stable value fund : a higher return while maintaining a stable net asset value with a little more risk than a money market fund .
urltoken . . . funds . html yes , both mmfs and stable value funds attempt to maintain a stable asset value , but stable value funds attempt to do this by investing farther along the yield curve and with the help of insurance contracts . the cost of liquidating these assets in an environment of rising interest rates is expensive to the fund and its remaining investors . other options such as short term and intermediate bond funds make no pretense of maintaining a
stable net asset value
so are inappropriate comparisons . it is understood that these investments can and will lose money on a day to day basis . also check out this explanation : urltoken . . . - wash . html
plan sponsors and consultants have asked the very reasonable question , how will my stable value fund perform in an environment of rapidly rising rates ? while not our base forecast , this paper explores how stable value funds fared in prior episodes of rising interest rates , and offers some observations and general comments on the current environment .
helot wrote : perhaps this is a better explanation
with all of that as a backdrop , let ' s look again at the objective of a stable value fund : a higher return while maintaining a stable net asset value with a little more risk than a money market fund .
urltoken . . . funds . html yes , both mmfs and stable value funds attempt to maintain a stable asset value , but stable value funds attempt to do this by investing farther along the yield curve and with the help of insurance contracts . the cost of liquidating these assets in an environment of rising interest rates is expensive to the fund and its remaining investors . other options such as short term and intermediate bond funds make no pretense of maintaining a
stable net asset value
so are inappropriate comparisons . it is understood that these investments can and will lose money on a day to day basis . also check out this explanation : urltoken . . . - wash . html
timing and feasibility for separately managed stable value portfolios may vary depending upon market conditions or how the re - enrollment is designed .
in my career , i have run a gic ( guaranteed investment contract ) desk at an insurer , designed one stable value fund , and helped administer and invest for several others . i know stable value funds , respect them , invest in them when it makes sense , but i am still a skeptic at some points .
in practice , stable value funds have survived other sponsors’ bankruptcies without a hitch . even enron employees who invested in their 401 ( k ) ’s stable value fund did not lose a cent . and remember that despite the dip in december , the lehman fund gained 2 . 2 percent overall in all of 2008 . not too shabby , considering the spectacular dives in nearly every other investment option .
my stable value fund has an er of 0 . 30 % which makes it one of the highest ers in my portfolio . it ' s a sizeable chunk also , half of my 401k .
jim roche has been in the retirement industry for over 20 years . prior to joining the standard , jim was the senior stable value analyst for westminster consulting in rochester , new york . before that he served as vice president of institutional stable value sales for prudential . for more information on guaranteed insurance stable value funds , contact jim at [ email protected ] or 732 . 815 . 2116 .
i added a new section to the wiki page and pointed back to this thread . please see stable value fund on the bogleheads wiki . comments / questions are welcome . wiki editors can update directly .
as historically low interest rates hold money fund yields down to around 50 basis points or lower , it ' s not uncommon for stable value funds to be yielding 1 . 5 % net of fees .
the exit provision is the notice period a plan sponsor must give before exiting a collective fund and receiving book value for its withdrawal .
you’re looking for investments that offer stability , liquidity , yield , and principal protection . understand the differences among your stable value options .
we focus on carefully managing the trade - off of portfolio duration relative to yield , and maintaining stable value through all rate environments .
according to mr . stewart , every new insurance contract has to be researched and monitored .
each insurance contract determines how the stable value fund portfolio can be invested ,
he said .
and each contract can have different guidelines , even in the same fund .
sconie wrote : i have virtually all of my fixed allocation in a 3 . 46 % ( net of expenses ) stable value fund - - - - to me it is a
no brainer .
in recent years , stable value funds have served as workhorse investments , accounting for 12 % to 15 % of assets in 401 ( k ) and other defined contribution retirement plans . the funds have $ 540 billion in assets , according to the stable value investment association .
as a 401k plan advisor , this uncertainty provides an opportunity . for sponsors with employees demanding more conservative investment vehicles , a guaranteed insurance stable value fund could be the ideal fit , as it potentially provides plan participants with safety of principal , liquidity and a stable rate of return .
why do 401k ' s that have a stable value fund as an investment option among others choices have restrictions as to where you can transfer that money to for the following 90 days ? from reading online , i understand that stable value funds lag interest rate changes , and that ' s the
reason .
but how is that different from any other 401k that may have a variety of bond fund options to choose from , each fund behaving differently to changes in interest rates ? there ' s generally no restrictions with moving money between bond funds and money markets , so why the special rules for stable value funds ? thanks !
book value payout can be immediate or over time , depending upon the plan ' s election . the stable value account remains fully benefit - responsive upon contract termination , and discontinuance fees do not apply .
an investment approach that provides tremendous flexibility — clients can choose from a variety of existing strategies , or a highly customized stable value design .
in my opinion , a stable value fund is a good substitute for bonds if you have no good bond choices in your work plan . or if it consistently pays near as much as or more than bonds .
i use the stable value fund in my 457 yielding 2 . 9 % . i put about half of my fixed income allocation into it . in my mind , it also serves as a cash allocation - my cash needs are inside my 457 . i can sell taxable equities , then buy equities in my 457 with the stable value fund without changing my asset allocation . as a result , i don ' t have a traditional emergency fund . i have a cash allocation earning 2 . 9 % .
most are only offered through 401k , 403b , or 457 accounts . one limitation of stable value funds is that they typically limit withdrawals and transfers from the funds to a certain percentage per year and / or upon obtaining a certain age ( 60 or 62 for example ) . this allows the stable value fund to extend maturities a bit for better yields .
ualdriver wrote : why do 401k ' s that have a stable value fund as an investment option among others choices have restrictions as to where you can transfer that money to for the following 90 days ? from reading online , i understand that stable value funds lag interest rate changes , and that ' s the
reason .
but how is that different from any other 401k that may have a variety of bond fund options to choose from , each fund behaving differently to changes in interest rates ? there ' s generally no restrictions with moving money between bond funds and money markets , so why the special rules for stable value funds ? thanks !
it’s no secret that many stable value funds are now underwater , with their underlying bond portfolios worth less than the guarantees , as lehman’s fund was . if your company were to go bankrupt with an underwater fund in its 401 ( k ) , a lehman - like loss is theoretically possible .
the protection from interest rate ebbs and flows is a unique feature all guaranteed insurance stable value funds offer , regardless of the invested asset performance .
the biggest single distinction between stable value funds and money funds is the yield , which can represent a gap of 100 basis points or more .
to find out how lincoln stable value solutions can help you support positive retirement outcomes , call our sales desk at 855 - 533 - 2170 .
^ indeed . for reference , my employer stable value is posting a yield of 1 . 78 % . caution and questions may be warranted .
when investors subscribe for funds , they will be given a certain number of fund units or shares whose value will change with the fluctuation of the net asset value of the funds . the price of each unit or share reflects the net asset value plus or minus any disclosed charges .
an s & p global ratings fund credit quality rating , also known as a
bond fund rating ,
is a forward - looking opinion about the overall credit quality of a fixed - income investment fund . fund credit quality ratings , identified by the ' f ' suffix , are assigned to fixed - income funds , actively or passively managed , typically exhibiting variable net asset values . they reflect the credit risks of the fund ' s portfolio investments , the level of the fund ' s counterparty risk , and the risk of the fund ' s management ability and willingness to maintain current fund credit quality . unlike traditional credit ratings ( e . g . , issuer credit ratings ) , a fund credit quality rating does not address a fund ' s ability to meet payment obligations and is not a commentary on yield levels . fund credit quality ratings are accompanied by fund volatility ratings ( i . e . , ' af / s3 ' ) - - when fund volatility ratings can be assigned - - to communicate our opinion about certain risks not addressed by a fund credit quality rating .
moreover , not all stable value funds are created equal . if you work for a small or midsize employer your fund might rely on a single insurer and could be at risk if that insurer became insolvent , as happened two decades ago with
guaranteed investment contracts
and executive life . pooled stable value funds , more common at larger companies , use multiple insurers . significantly , in march bond giant pimco launched a pooled fund for midsize employers .
if i ' m picking funds for the bond segment of my allocation and i ' m working the us bonds portion , i have the following choices : a stable value fund in my fidelity 401k fund , currently paying about 2 % yield , or intermediate bond funds are paying slightly more , say 2 . 1 % , but with a duration of around 5 years . given interest rates are far more likely to go up than down , is there any reason not to choose the stable value fund ? am i correct in considering it to effectively have a duration of zero ? i know there is a slight default risk in the stable value fund , but it still seems like the correct choice . could not get a straight answer from fidelity .
both are bond portfolios wrapped in insurance contracts to guarantee stable value and a certain yield , but a collective investment trust diversifies the risk across multiple insurance contracts , while direct stable value funds are insured directly by the issuer ' s own balance sheet , essentially becoming their own guaranteed investment contract .
to summarize , while stable value funds are not risk free , they remain a viable , low - risk option for defined benefit plan participants . plan sponsors should work with their advisors to identify well established stable value products managed with an eye on interest rate , credit and liquidity risk controls .
wrap capacity is dependent on external insurance companies and banks to provide guarantees . book value contracts issued to fund and terms not disclosed to a plan .
stable value funds invest in fixed - income investments and wrap contracts or
wrappers
offered by banks and insurance companies . wrap contracts generally guarantee a certain principal and interest rate of return , even if the underlying investments decline in value . so they offer even more protection from interest rate volatility from bonds . the rate of return remains stable , even when everything else is not . that doesn ' t mean they never lose value . during the market turmoil of 2008 , stable value funds declined in value slightly , another victim of the failure of lehman brothers and resulting credit crunch .
what ' s not to like ? restrictions on withdrawals are a drag compared with money market funds . to prevent yield chasing , most stable value funds prohibit transfers to similar options , such as a money market or short - term bond fund . instead , you have to move your money first to , say , a stock fund , for 90 days or so . ( cash withdrawals have no waiting periods . ) and in the rare case that your employer ends its participation in a stable value fund , your money might be held for up to 12 months ( still earning a return ) as the fund unwinds .
markwhy wrote : if i ' m picking funds for the bond segment of my allocation and i ' m working the us bonds portion , i have the following choices : a stable value fund in my fidelity 401k fund , currently paying about 2 % yield , or intermediate bond funds are paying slightly more , say 2 . 1 % , but with a duration of around 5 years . given interest rates are far more likely to go up than down , is there any reason not to choose the stable value fund ? am i correct in considering it to effectively have a duration of zero ? i know there is a slight default risk in the stable value fund , but it still seems like the correct choice . could not get a straight answer from fidelity .
i added coobert ' s article to the wiki ' s
external links
section , as well as a suggested overview update from peter foley . wiki article link : stable value fund comments / questions / concerns are welcome .
nevertheless , stable value funds tend to offer higher returns than money market funds and other low - volatility alternatives , and so many 401 ( k ) plan participants in plans that offer stable value funds appreciate the diversification they offer . for those seeking long - term capital appreciation , stable value funds won ' t provide the level of growth most people need to achieve their retirement goals . however , as a component of a balanced portfolio that includes more growth - oriented investments , stable value funds can reduce overall portfolio risk while avoiding some of the key pitfalls of many fixed - income investment options .
ever since the sec upgraded its rules for money - market funds last fall , retirement plan advisers have been giving stable value funds a second look .
of the more than 250 retirement plans under sheridan road ' s advisement , mr . karam said 95 % include some form of stable value offering .
i too would go with the stable value alternative . my wife and i have more than half of our fixed in stable value funds , all of which are earning more than 3 % . there are some withdrawal restrictions , but this is not money we need to access in the near future .
a fund volatility rating is a forward - looking opinion about a fixed - income investment fund ' s volatility of returns relative to that of a
reference index
denominated in the base currency of the fund . a reference index is composed of government securities associated with the fund ' s base currency . fund volatility ratings are not globally comparable . fund volatility ratings reflect our expectation of the fund ' s future volatility of returns to remain consistent with its historical volatility of returns . fund volatility ratings reflect s & p global ratings ' view of the fund ' s sensitivity to interest rate risk , credit risk , and liquidity risk , as well as other factors that may affect returns such as use of derivatives , use of leverage , exposure to foreign currency risk , and investment concentration , and fund management . different symbology is used to distinguish fund volatility ratings from s & p global ratings ' traditional issue or issuer credit ratings . we do so because fund volatility ratings do not reflect creditworthiness but rather our view of a fund ' s volatility of returns .
some investors think of stable value funds as bank accounts . the funds protect principal and pay interest . but the stable value accounts are not guaranteed by the federal deposit insurance corp . instead the returns of the funds are protected by insurance contracts known as wraps that are offered by banks and insurance companies .
for now , though , hueler points out that stable value funds are typically not dependent on a single wrapper or type of contract . losing one wrapper means the fund manager would reallocate those dollars to a different wrap or contract provider . worst - case scenario : if a fund lost a wrapper and couldn’t get a replacement , the fund’s manager would swap the previously wrapped bonds for ultra - safe cash investments , getting a money market - like return until another book - value contract could be put into place . the upshot : the fund’s yield would drop , but its value would not suddenly become subject to bond market fluctuations .
open - ended funds do not have a fixed number of fund units . units can be subscribed and redeemed at the time and venue agreed in the fund contract .
the tool is designed to help advisors bring a procedurally sound due diligence process to the evaluation and ongoing monitoring of stable value products in their clients’ portfolios .
synthetic gic : the account invests in a portfolio of fixed - income investments
wrapped
in insurance contracts that protect the underlying value of the investment . these make up a good percentage of today ' s stable value funds .
wash restrictions reduce some of the risk in stable value funds . the underlying assets are pretty stable , but may include bonds or other assets that can fluctuate in value and which can incur real losses if liquidation is forced . however , a
book value
is assigned for the investor ( principal plus interest ) . if the assets ' market values have fluctuated downward and bond fund interest rates pop upward , investors would quickly move from stable value to the bond funds , thus forcing mass liquidation of assets that can ' t cover the investors ' book values . the insurance company ( ies ) guarantying the book value could potentially be overwhelmed by redemptions and unable to cover the gap . . .
so what’s a stable value fund ? it’s a short - to - intermediate term fixed income pool that has some agreements on the side to allow the assets to be accounted for at book value , so that the investment accrues at a positive rate . it looks like a savings account to the investor , not a short - to - intermediate term bond fund . because it invests at longer maturities than money market funds , they deliver higher yields than money market funds , except in years worse than 1994 , where yields rise rapidly and the yield curve inverts . ( stable value funds did not exist in the 1979 - 1981 era ; perhaps money market yields would have been higher than stable value yields would have been then . the precursor to stable value funds , initial participation guarantee funds , ran into trouble then . that trouble led to the development of gics . )
and for me , the restriction is moving from an sv fund to a self - managed account ( outside the 401 ( k ) plan ) .
amounts that are transferred out of a stable value account must remain in ( another 401 ( k ) fund ) before transfer into a self - managed account for 90 days .
iow , there are no restrictions between the sv fund and other funds within the same 401 ( k ) plan . update : removed comment about fund managers .
a fund is a source of money that is allocated for a specific . . .
cerulli study says mutual fund companies and wealth managers are swimming in the same channels .
overseas investment plan - qdii offshore fund / overseas investment plan - qdii overseas bond .
capital gain potential - you can benefit from capital appreciation if fund prices move up .
the fund ' s portfolio is predominantly exposed to defaulted assets and / or counterparties .
your 401 ( k ) may call its stable value option something else , like a capital preservation fund or fixed - interest fund , but whatever the name , it ' s essentially the same thing : a portfolio of bonds and other low - risk investments guaranteed against loss by a collection of insurance companies . last year , the average stable value fund returned 4 . 58 percent , compared with 2 . 89 percent for money markets and 5 . 07 percent for intermediate bond funds . investors fleeing stock funds in their ravaged 401 ( k ) s transferred more than $ 5 billion into stable value funds last year ; these funds now make up more than 36 percent of 401 ( k ) plan assets , according to hewitt associates .
a national scale fund credit quality rating is a forward - looking opinion about the overall credit quality of a fixed - income investment fund relative to that of other fixed income investment funds in the national market . national scale fund credit quality ratings , identified by the ' f ' suffix ( as are the global scale fund credit quality ratings ) , are assigned to fixed - income funds , actively or passively managed , typically exhibiting variable net asset values , and also include a country prefix denoted as ' xx ' . national scale fund credit quality ratings reflect the credit risks of the fund ' s portfolio investments , the level of the fund ' s counterparty risk , and the risk of the fund ' s management ability and willingness to maintain current fund credit quality . unlike traditional credit ratings ( e . g . , issuer credit ratings ) , a national scale fund credit quality rating does not address a fund ' s ability to meet payment obligations and is not a commentary on yield levels . national scale fund credit quality ratings are accompanied by national scale fund volatility ratings ( i . e . , ' xxaf / xxs3 ' ) - - when national scale fund volatility ratings can be assigned - - to communicate our opinion about certain risks not addressed by a fund credit quality rating .
oney - market funds and others , known as stable value funds , act as cash equivalents ; they provide small and steady returns , along with principal protection .
your opportunity to invest in stable value funds outside of 401 ( k ) / defined contribution world has gone away , but given that there is over $ 200 billion invested in stable value funds , and not much has been written on them from a third party point of view , i’ll describe them in more detail .
portfolio7 wrote : stable value funds are typically bonds with an insurance wrapper , and act like cash with a near 3 % return ( in my plan ) .
the beauty of a good stable value ( sv ) fund ( or good direct cds , the tsp g fund , etc . ) is that it provides a higher expected return than short - term treasuries but with not a huge amount more risk . the risk is absorbed by the insurance company in return for liquidity constraints on the fund , so essentially you are receiving a rich liquidity premium . it has almost no term risk , compared with significant term risk for an intermediate - term treasury fund , and although it has some credit risk , historically this credit risk has been minimal . the only sv fund loss i know if is a small loss in 2008 in the sv fund used by lehman , and even that fund had a positive return for the year .