Frank Foy, former chief investment officer of the $8.3 billion New Mexico Educational Retirement Board, Santa Fe, today added consultants NEPC, Merrill Lynch and Calyon Securities as defendants in its state pay-to-play lawsuit against Vanderbilt Capital.
Also added as defendants were placement agent Marc Correra and Anthony Correra, a political operative who raised money for New Mexico Gov. Bill Richardson, as well as NEPC partner Allan C. Martin.
Mr. Foy first filed the suit on behalf of the state on July 14, 2008, but it was not unsealed until January 2009, claiming that while CIO he had been pressured to invest with Vanderbilt, which had contributed to Mr. Richardson's presidential campaign, and that Gary Bland, former state investment officer, had pressured the New Mexico State Investment Council, Santa Fe, to invest in collateralized debt obligations that proved to be worthless.
Mr. Foy retired as CIO in 2008, and Mr. Bland resigned as state investment officer in October 2009.
In an amendment to the original lawsuit, some of the defendants are now accused of conspiring to turn the $13.4 billion state investment council and the Educational Retirement Board into a “slush fund.” The amendment also claims $288 million in actual damages from lost principal and investment losses and seeks to have that money returned to the state.
Mr. Martin and William Y. Bogle IV, managing partner and chief compliance officer of NEPC, could not be reached for comment by press time. Merrill Lynch spokesman Bill Halldin declined to comment because firm executives had not seen the complaint. The complaint alleges that Marc Correra moved to Paris and that Anthony Correra left New Mexico. Neither Marc Correra nor Anthony Correra could be reached for comment.