RUSSIA - BANK LINES - AP 2-24-2022.jpeg
FILE - A food delivery man leaves an exchange office with screen showing the currency exchange rates of U.S. Dollar and Euro to Russian Rubles in Moscow, Russia, Thursday, Feb. 24, 2022. The ruble plunged to a record low of less than 1 U.S. cent in value Monday after Russia was cut off from the global bank payments system in retaliation for Moscow’s invasion of Ukraine. (AP Photo/Alexander Zemlianichenko Jr.,File)

LOUISVILLE, Ky. (WDRB) -- Rumors swirled Friday that the pension system for Kentucky teachers lost huge investments in Russian banks, but a lawyer for the system said the reports are inaccurate. 

Beau Barnes, general counsel for Teacher Retirement System, said Friday that the TRS investment in Russian bank Sberbank was largely negligible. According to Barnes, TRS invested $15.6 million in Sberbank in March 2017. TRS sold its position in the Russian bank on Feb. 23, 2022, for $12.4 million. Initially, TRS indicated that would have created a $3.2 million loss. However, Barnes said Friday afternoon the "loss was offset by dividends of over $3 million paid over the timeframe, resulting in a net gain of about $200,000."

"TRS's remaining exposure to holdings in Russia is proportionately negligible in a portfolio of about $26 billion," Barnes said. 

The rumor mill began swirling when a tweet claimed TRS was the second-largest investor in Sberbank and had lost 95% of its investment. 

"TRS’s holding was in an over-the-counter, American-exchange portion of Sberbank known as an American depositary receipt (ADR)," Barnes said. "This is a small piece of the overall Sberbank capital structure."

Shares for the Russian bank plunged Wednesday after it was announced that it would pull out of European markets. Numerous state leaders called for divestment from Russian holdings this week.

"I strongly encourage divestment from all Russian holdings," Kentucky Treasurer Allison Ball said in the statement. "Outside fund managers who maintain indirect holdings of pension funds should proceed with divestment from Russia. Any individual holdings of pension funds should also be divested through best efforts as soon as possible." 

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