Vanderbilt Capital settles with 2 New Mexico funds for $24 million

New Mexico State Investment Council and the $10 billion New Mexico Educational Retirement Board, both of Santa Fe, have settled with money manager Vanderbilt Capital Advisors LLC for $24 million, said Charles Wollmann, spokesman for the $16.6 billion New Mexico State Investment Council in an e-mail.

Frank Foy, former chief investment officer for the New Mexico Educational Retirement, sued Vanderbilt in a 2008 whistle-blower lawsuit alleging an illegal pay-to-play scheme in which placement agents received payments in exchange for gaining investments with the funds.

New Mexico Educational Retirement Board will receive $4.25 million, said CIO Bob Jacksha in an e-mail. New Mexico State Investment Council’s share is $20 million.

Neither the council nor the pension fund had yet sued Vanderbilt, but both claimed Vanderbilt made improper payments in connection with collateralized debt obligations and with Vanderbilt Financial Trust, a special-purpose entity managed by Vanderbilt. These investments were made with Vanderbilt from 2004 through 2006.

Peter Simmons, attorney for Vanderbilt could not be reached by press time.

— Contact Arleen Jacobius at ajacobius@pionline.com | @Jacobius_PI