After the $62 billion Illinois Teachers board of trustees met with legal counsel, the board did not notify any TRS paricipants that their information had been emailed, in part because "the Board was advised that the information Mr. Lenoir took would retain its confidentiality" under a reciprocal data exchange agreement, the report said.
Between Feb. 15 and March 7, 2022, the OEIG communicated with Mr. Lenoir, and then with his attorney, about scheduling an interview. On March 7, his attorney said Mr. Lenoir would exercise his Fifth Amendment rights and would not answer any of the OEIG's questions if subpoenaed. The OEIG elected not to subpoena him.
Mr. Lenoir also emailed himself a Public Markets Oversight Committee meeting packet that contained investment amounts, payout amounts in incentive fees and performance breakdowns for TRS investment funds/managers; investment presentations described as containing "highly confidential information;" and fiduciary evaluations of investment practices and policies labeled "proprietary and confidential."
A TRS employee, whose named was redacted, confronted Mr. Lenoir in 2021 and 2022, and Mr. Lenoir did not deny that he had forwarded the TRS materials to himself — and said he was not sure why — according to the report.
Illinois Teachers' Retirement System said it "has no comment about the report. We also cannot comment on personnel matters," said spokeswoman Kathy Boehme.
Jim Vail, a Chicago-based blogger who broke the news of the OEIG report, said "there's a lot of potential problems with this case. The teachers, I would imagine, would be upset about their personal information" being sent outside the organization, and "they could have a lawsuit on their hands."
Former SEC attorney Ted Siedle, a pension fund advisor and forensic investigator, said "In my opinion, retirement participants in both funds should be concerned. The facts give rise to questions that should be answered."
In addition, hedge funds and other alternative asset managers often insist that many institutional investors sign non-disclosure agreements regarding their underlying portfolios.
If that was revealed, "that could open them up to liability," said Mr. Vail, editor of the Second City Teachers newsletter. "While it's not right that the managers demand NDAs, that's the way it is."