The San Diego County Employees Retirement Association (SDCERA) announced that although it terminated its relationship with WG Trading as of December 31, 2008, it has not received the $78 million it had invested with the firm. SDCERA’s decision to terminate WG Trading was based on the fund manager’s refusal to promptly and completely answer all questions presented to it during a due diligence review, according to the announcement.
The retirement system said that at that time fraud was not suspected.
On Wednesday it was announced that two managing general partners of WG Trading Co. of Greenwich, Connecticut, have been charged with running an estimated $550 million investment fraud. Paul Greenwood and Stephen Walsh have been charged with conspiracy, securities fraud, and wire fraud (see Money Manager Fraud Snares Public Pensions).
A separate civil complaint filed by the U.S. Securities and Exchange Commission said the men solicited numerous institutional investors, including educational institutions and public pension and retirement plans, by promising to invest their money in an “enhanced equity index” strategy.
Aside from the San Diego County System, the Sacramento County Employees’ Retirement System (see Sacramento County Victim to Latest Money Manager Fraud ) and the Iowa Public Employees’ Retirement System (see Iowa State Pension Hit for $339M in WG Trading Fraud ) have since announced that they had money invested with the WG Trading.