Many officials at a money-management firm that were involved in overseeing Florida’s pension fund subjected Enron Corp. to criticism, as it became bankrupt in 2001. The energy trading company’s executives were even called "slime balls," said one researcher at the firm, Alliance Capital Management LP. Nevertheless the top manager who supervised the state’s pension money kept buying more Enron shares. Florida’s officials characterized it as a desperate attempt to return money after the stock-market bubble burst in 2000. It resulted in a loss of more than a quarter of a billion dollars.

Now Florida’s pension board is filing a lawsuit against Alliance, aiming at recovering the losses, plus getting punitive damages. Opening statements commenced in state court in Tallahassee on March 8. This suit is only one in a string of civil and criminal cases originated from the bubble’s aftermath, and court records unveil how a giant money manager reacted as a major holding broke up.

Alliance, which manages $533 billion, has already faced lawsuits. In December 2003, it was accused of allegedly allowing improper rapid buying and selling of shares in its mutual funds, draining long-term investors’ returns, according to the Aall Street Journal. It settled with regulators for $600 million, refusing to admit or deny any wrongdoing.

In the Florida case, Alliance’s vice chairman, Alfred Harrison, the top portfolio manager for Florida’s account, is accused of failing to base his Enron decisions on substantial research. The suit alleges that Alliance deceived pension-fund officials by concealing from them how negatively many at the firm viewed Enron.

Florida also accuses Alliance of failing to disclose that a board member, Frank Savage, was also a member of Enron’s board and had close relations to Enron founder Kenneth Lay.

Alliance denies any wrongdoing, saying Mr. Harrison’s Enron purchases corresponded to a contrarian strategy he had long used with Florida’s full knowledge: Buying falling stock at prices that in his opinion were far away from its true potential. Since Mr. Harrison carried out responsibility for the Florida account, Alliance argues in court papers, the statements on his Alliance colleagues and Mr. Savage’s relationship with Enron were inappropriate.