MBTA Retirement Fund, Boston, needs to become more transparent following its $25 million loss after investing with Fletcher International Ltd., according to Massachusetts Attorney General Martha Coakley.
The attorney general also suggested that if the MBTA plan does not adopt standards common at other public pension funds in the state, she might propose legislation to mandate such changes, said Brad Puffer, Ms. Coakley's spokesman.
According to MBTA Retirement Fund's website, in 2007 it invested $25 million in the Fletcher Fixed Income Alpha Fund. The money manager filed for Chapter 11 bankruptcy protection in June 2012, ultimately bringing the investment value down to zero.
For more than two years, the retirement fund's board neglected to disclose its $25 million investment loss, while Fletcher has now been accused of fraud in a report written by Richard J. Davis, a court-ordered bankruptcy trustee. The attorney general's office is currently reviewing the $1.6 billion pension fund.
“Fund management is working to recover damages from both (company founder Alphonse) Fletcher and the potentially responsible third parties who enabled him,” said a statement on the pension fund's website.
Calls to MBTA Retirement Fund were not returned by press time.