Some strange info trickling out over at McClatchy Watch to the effect that McClatchy’s pension fund lost some $77m. in the Westridge Capital Management investment fraud case. That case exploded last February as the SEC claimed Westridge’s managers defrauded investors of $554m. out of $621m. they had invested.
Clients included public pension plans like the Sacramento County Employees’ Retirement System. MNI is headquartered in Sacramento.
Several public pension plans reportedly severed ties with Westridge months ago, but I do not recall MNI ever being linked to exposure in the alleged fraud.
A lawsuit by the Commodity Futures Trading Commission claims that Westridge managers directly siphoned off funds to support their lavish lifestyle of horse farms and rare books.
In the past few weeks investors have begun to acknowledge the losses they incurred from Westridge, with the University of Pittsburgh out about $35m. of the $65m. the institution had invested. Meanwhile, Bowling Green University announced recently that it will take years to recover any of the $15m. the school had placed with Westridge.
As such, it is unclear if the $77m. represents the total amount MNI had placed with Westridge or the amount company officials expect to lose. To my mind — and with several multi-billion pension funds ahead of MNI in the recovery pecking order — the sound assumption would be to say that all of the money is long gone.
