A Des Moines Register news report said Deputy Iowa
Attorney General Jeffrey Thompson told IPERS board members
that federal regulators and a court-appointed receiver will
continue to try to recover money allegedly swindled from
the firm’s clients.
Thompson told the IPERS board that authorities don’t yet
know how much money would be available for recovery.
The two money managers connected with Westridge currently face federal securities fraud charges (see Iowa State Pension Hit for $339M in WG Trading Fraud ). The firm’s two principals, Stephen Walsh, 64, of Sands Point, New York, and Paul Greenwood, 62, of Salem, New York, are accused of stealing as much as $554 million from investors to support lavish lifestyles. Their assets have been frozen by a federal judge in New York.
According to the Register, IPERS initially invested $400 million with Westridge Capital Management on April 4, 2007. Another $50 million was invested on October 20, 2008, along with an additional $50 million on Dececember 1, 2008, for a total investment of $500 million, state officials said.
IPERS officials have defended their investments with Westridge, saying extensive due diligence was performed before Iowa pension money was invested with the firm (see IPERS Responds to Lawmakers on Trading Fraud Investments ). Wilshire Associates, a consulting and asset management firm, highly recommended Westridge and it was overseen by five regulatory bodies, officials said.
According to the Register, 26 institutional investors, including the University of Pittsburgh, Carnegie Mellon University, and the North Dakota State Investment Council, had also invested money with the firm.