The Massachusetts Public Employee Retirement Administration Commission, Somerville, plans to conduct a final investigative hearing Oct. 11 to review the investment practices of the Middlesex County Retirement Board, Billerica, and a former manager, now-defunct Cambridge Financial Management, confirmed Thomas F. Gibson, Middlesex board chairman and legal counsel.
The purpose of the hearing is to accept additional information, documents and comments as part of an ongoing investigation into the relationship between the $660 million plan and CFM, according to a posting on the PERAC website. After review, PERAC will likely decide whether to keep a three-year-old order restricting the plan's investment activity.
PERAC in 2003 started looking into a $38 million currency overlay strategy Cambridge had run for the plan and found that the Middlesex board did not follow the appropriate regulatory procedure when entering into an agreement with the firm in 1999. Plan officials and consultant Wainwright Investment Counsel failed to adequately monitor a "questionable fee arrangement that siphoned $2.8 million from public employee pension funds (through CFM Principal James Kneasfey) for the benefit of two men, Ronald A. Whitham and Thomas F. Kelly, who had little or no role in the company's investments, according to a January letter from state Inspector General Gregory Sullivan to PERAC.
PERAC released its preliminary findings last fall after an earlier investigation, and Mr. Gibson said more data could be submitted at the new hearing before a final conclusion is made. He could not comment on when the conclusion would be released.