IPERS Responds to Lawmakers on Trading Fraud Investments

March 4, 2009 (PLANSPONSOR.com) - Officials of the Iowa Public Employees' Retirement System (IPERS) told state lawmakers they have hopes of recovering some of the assets frozen when federal regulators arrested two money managers on fraud allegations.

The Quad-City Times reports that Karl Koch, chief investment officer for IPERS, said the fund already recouped about $29 million in margin account funds when it terminated a contract with Westridge Capital Management last month. Koch and Donna Mueller, IPERS’ chief executive officer, told the Legislature’s Government Oversight Committee they have “unsubstantiated” reports that there may be “a substantial amount of assets” left for potential distribution in the frozen assets now under the control of a court-appointed receiver, according to the newspaper.

“We’re going to aggressively pursue every last dollar,” Mueller told lawmakers.

Last week, IPERS announced it had placed $339 million with Santa Barbara- based Westridge Capital and WG Trading Co. of Greenwich, Connecticut (see Iowa State Pension Hit for $339M in WG Trading Fraud). Two owners of the firms have been arrested on fraud charges (see Money Manager Fraud Snares Public Pensions ).

IPERS said last week its board has hired the Indianapolis law firm of Ice Miller LLP to help recover the funds.