Legg Mason posted miserable fourth-quarter results this morning -- a net loss of $1.5 billion, mostly because of the sale of poorly performing structured investment vehicles debt issued by a SIV, which everybody knew about, and new writedowns of the value of investment units that Legg had previously purchased, which everybody suspected.

What's interesting is that Legg would use its earnings release to puff its few investment managers who didn't have a terrible year. With Legg's marketing model founded on the star-manager system, with former stars Bill Miller and Bruce Sherman not glittering so brightly, the firm is trying to draw attention to new names.

From Legg's filing this morning:

Mr. Fetting commented, “As 2008 came to an end - the most tumultuous year in modern financial history - all of Legg Mason was honored by the news that our own Charlie Dreifus, Principal of Royce & Associates, was named Morningstar Domestic Stock Manager of the Year for his stewardship of the Royce Special Equity Fund.

Hersh Cohen, Chief Investment Officer of ClearBridge Advisors, and his partner, Scott Glasser, were among five other finalists for the same award, the most prestigious in our industry. Despite all our challenges, the work of Charlie, Hersh and Scott, among many others across our affiliates, are proof points of true investment excellence within Legg Mason and demonstrate why clients continue to work with us.”

In honoring Mr. Dreifus, Morningstar called him “a balance sheet skeptic” and described his fund as an “oasis of calm” in turbulent markets: “Charlie Dreifus made it a lot easier for investors to get back into the black than many of his peers.” Morningstar continued, “The Royce Special Equity Fund held up brilliantly in the bear market of 2000-2002 and it did so once again in 2008.”

SmartMoney recognized two Legg Mason funds as part of the “100 Great Funds” for 2009, given to mutual funds that have posted the highest returns since the 1987 market crash. Hersh Cohen and Scott Glasser were honored for their management of the Legg Mason Partners Appreciation Fund and Mr. Glasser, along with Peter Hable and Peter Vanderlee, took honors for the Legg Mason Partners Dividend Strategy Fund. SmartMoney criteria include fund returns in the top fifth of their categories for the past 5 and 10 years, resilience in bear markets and managers with long-term experience in running the fund.