Insider Trading Alleged at Utah Fund

February 10, 2003 ( - Richard Cherry, the chief investment officer of Utah's $11.5 billion public employee retirement fund, is being investigated for allegedly making "personal investments that may have been designed to benefit from a sale of a large block of stock that he made for the URS (Utah Retirement System)."

That, according to a state audit report commissioned by the state legislature, released last Thursday.   Before details of the audit came out, Utah Speaker of the House Marty Stephens told Reuters last week that information from the probe had been released to the Securities and Exchange Commission.

Brent Goodfellow, the Minority Leader of the Utah House of Representatives and one of several legislators who oversees the pension fund, told Reuters Cherry made 11 allegedly suspicious trades over six years.

The insider information, however, did Cherry little good since he lost nearly $2000 on the trades, according to the report.

However, Cherry’s attorney told Reuters the auditor’s report “was flawed and the result of a superficial investigation.”

Cherry may not have acted alone.   Goodfellow said the fund’s trustees suspect other staff members of malfeasance as well.   Goodfellow stressed that it is premature to say criminal activity occurred, “but the potential is there,” according to the report.