ISTA Securities Fraud Lawsuit

In December 2009, the Indiana Securities Division filed a civil complaint against the Indiana State Teachers Association (ISTA), the ISTA Insurance Trust, and several other related entities. The complaint, filed in Marion County Superior Court, and since removed to the United States District Court for the Southern District of Indiana, alleges that ISTA unlawfully offered and sold investments in a health arrangement to dozens of Indiana school corporations, violating several provisions of the Indiana Securities Act.

Much of the money paid into the ISTA-controlled trust was intended to be used for health claims with a promise of a return on reserves. But according to the complaint, this money was comingled by ISTA with funds from other sources including long-term disability plan payments and invested by ISTA without the knowledge of the school corporations. The complaint alleges that ISTA now is unable to properly account for approximately $23 million intended for school districts.

Specific counts allege ISTA and its entities sold unregistered securities and made untrue statements and/or failed to disclose information about the financial soundness of the health arrangement and how the school corporations’ contributions would be invested.

Latest Action:

State sues teachers' union for securities fraud (IBJ) Verified Complaint for Appointment of Receiver (Marion County)
Rokita files complaint against ISTA (Courier Press) Order Addressing Pending Motions (U.S. District Court)
New civil suit targets Indiana teachers association (The News Dispatch) Case Management Plan (U.S. District Court)
State files securities violations complaint against ISTA (Carroll County Comet) Protective Discovery Order (U.S. District Court)
State lawsuit is another blow to teachers union (Indy Star) Order Denying Defendant's Motion for Protective Order (U.S. District Court) 
Rokita slams ISTA funding candidates (Indy Star) Motion to Amend Current Complaint (U.S. District Court)
ISTA Timeline (Indy Star) Verified Amended Complaint (U.S. District Court)
ISTA Letter Order on Motion for Extension of Deadline for Expert Disclosure (U.S. District Court)

Related Info:

  • If you have an inquiry or have additional information the Securities Division should consider, please email Please include your name, address and daytime contact information.
  • If you are a member of the media, please contact
  • If you would like to file a complaint, please use the online form.
  • For tips on avoiding investment fraud and scams, please visit Indiana Investment Watch.