In the pension plan’s Form 5500 filed in October 2009, the
company said it took the most conservative approach in reporting the total loss
from the investment at about $77.8 million. McClatchy said it expects to make a
partial recovery of these funds through the legal process that is under way,
and that “[a]ny losses our pension plan may ultimately suffer as a result
of this situation will not jeopardize the overall health of our pension plan
which is broadly diversified and generating healthy returns.”
As of January 31, 2009, The McClatchy Company Retirement Plan had $64.4 million invested with Westridge. The company said it had decided to leave the fund prior to any knowledge of allegations of fraud and had requested a full redemption of the investment. The redemption required a six-month notice period and, as a result, was not executed before discovery of the alleged fraud and the seizure of the Westridge fund by the SEC and its ultimate turnover to a court-appointed receiver.
In February 2009, two managing general partners
of Westridge, Paul Greenwood and Stephen Walsh, were charged with conspiracy,
securities fraud, and wire fraud.
The fraud perpetrated by the managers in companies they owned affected a number of public pension plans as well (see List of Public Pensions Snared in WG Trading Scandal Grows).
« CalSTRS Backs Instituitonal Investor Conduct Code