Iowa Public Employees’ Retirement System, Des Moines, expects to receive $215 million by the end of the month as its initial recovery in the Westridge Capital Management fraud case, according to a statement from the $22.27 billion system.
Westridge managers were charged with operating a fraudulent scheme misappropriating at least $554 million of institutional investor capital since 1996.
The amount represents “74% of the investment’s last carried market value and 85% of IPERS’ remaining principal,” according to the statement, issued April 1.
The amount is part of a proposal by a court-appointed receiver for the distribution of $815 million of the assets recovered so far and approved by U.S. District Court Judge George B. Daniels in New York March 1, according to the judge’s order and the Iowa PERS statement.
“Since February 2009, a court-appointed receiver has been collecting investments and assets of Westridge Capital Management, WG Trading Co., and the individual principals of these two companies due to the alleged fraudulent investment schemes.
“Over 50 other institutional investors are involved, and there is a possibility that some may appeal the judge’s ruling, which could delay the distribution of funds,” the statement said, adding IPERS officials expect to know more by late April.
Among other investors, the endowments of the University of Pittsburgh and Carnegie Mellon University, Pittsburgh, invested $65 million and $49 million, respectively, with Westridge, according to their 2009 joint lawsuit against the firm.