As reports that two trustees at TIAA-CREF resigned over a relationship with company auditors Ernst & Young broke on Monday, TIAA-CREF was getting more bad news. According to an SEC filing, SEC staff notified the company that same day that it was beginning an informal investigation into the company and its funds related to the Ernst & Young matter.

The investigation concerns a business venture owned by the two trustees, William Waltrip and Stephen Ross. Ross and Waltrip's venture entered into a relationship with the valuation practice of Ernst & Young on August 1, 2003, according to the filing. Ross, the majority owner of the company, received or will receive $1.33 million from Ernst & Young as a result of the relationship.

TIAA-CREF officials said they would immediately begin a request for proposal for a new auditor.

In an open letter, Herb Allison , chief executive of TIAA-CREF, said that the company has determined that Ernst & Young's 2003 and 2004 audits were not compromised as a result of the relationships.

Allison also noted that the company has hired an independent advisor, Nicholas Katzenbach, to review the matter. 

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