NEW: Forbes’ Siedle Launches Crowdfunding Site to Investigate Pensions

Thursday, March 12, 2015

 

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Edward Siedle

Former SEC lawyer and Forbes columnist Edward Siedle, who investigated then-General Treasurer Gina Raimondo's pension investments in 2013, has launched a crowdfunding site for participants to investigate retirement plans.  

"This is a paradigm shift," said Siedle. "And one of the upsides is that there's anonymity -- if individuals want to to have funds investigated, they can do so with complete privacy."

According to the website, interested parties can call or email to start the process of potentially look into local and state pensions plans, private corporate pension plans, defined contribution plans, 457, or 403(b) plans.  

"Call, or email us, if you would like to propose an investigation you are willing to contribute toward. If we agree a high-impact investigation is possible at an achievable funding level, we will post the investigation for funding on kickstarter.com. If the project doesn’t meet its funding goal, no money changes hands. The funding goal will be the minimum amount we believe is needed to complete the investigation," write Siedle on the site.    

See the Website HERE

"The time is ripe to use crowdfunding to disrupt the fundamentally-flawed pension and retirement plan paradigm that has failed the nation’s retirement savers for decades. The existing paradigm, which specifically excludes the very individuals whose money is at risk,  never did make any sense. Participants allowed no voice whatsoever in how the plans in which they invest are structured, or managed? That’s the way it’s been for over fifty years," said Sieldle.

In a piece in Forbes Magazine, Siedle explains the concept of crowdfunding for pension investigations. 

"The perennial question has been: who’s willing and able to pay for an in-depth expert investigation? A second opinion, if you will," wrote Siedle.  "Today participants pay the cost of the financial advisers their employers hire to handle plan matters yet lack access to experts of their own choosing to review decisions that are supposedly made solely with their best interests in mind. Lacking plan-specific information and expertise, participants are incapable of weighing-in on plan matters even if they wanted to. And, as mentioned earlier, the existing paradigm does not permit participant input."

"I've gotten quite a reaction so far since this has launched," said Siedle.  "It will be interesting to see how wants to see this type of investigation of pension funds."

Siedle notes that to date in his career he has investigated over $1 trillion in retirement plans for conflicts of interest; excessive and undisclosed fees; investment underperformance and wrongdoing.

 

Related Slideshow: RI Public Pension Reform: Wall Street’s License To Steal

See the key findings from Forbes' columnist Edward Siedle, who unveiled his investigative report into the RI pension system, "License to Steal," in October 2013.  

"The Employee Retirement System of Rhode Island has secretly agreed to permit hedge fund managers to keep the state pension in the dark regarding how its assets are being invested; to grant mystery hedge fund investors a license to steal, or profit at its expense using inside information; and to engage in potentially illegal nondisclosure practices," said Siedle.  

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Treasurer’s Lack of Transparency

 
"There has been a sinister pall of secrecy regarding fundamental investment information orchestrated by state officials and aided by key investment services providers. "
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So-Called Pension Reform Scheme Permanently Reduces Benefits To Retirees

"Whether retirees receive any COLA will depend upon both ERSRI’s funding level and the Fund’s actual investment returns—both of which are volatile, unpredictable and subject to manipulation by elected officials and others. The manipulation of both of these key goalposts has already begun. "

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SEC Should Investigate ERSRI’s Failure to Disclose Skyrocketing Investment Expenses 

 
"The Treasurer has intentionally withheld information about soaring investment fees which is material in assessing both whether ERSRI should invest in costly alternative investments and whether benefit cuts are necessary to improve pension funding."
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Lose-Lose: Alternative Investments Both Reduce Returns and Increase Risk 

 
"The Treasurer’s representations regarding the level of risk related to ERSRI’s hedge fund investments are wholly inconsistent with the hedge fund managers’own words."
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ERSRI Agrees To Be Kept In The Dark, Grants Mystery Investors Licenses to Steal and Consents To Potential Nondisclosure Illegalities 

 
"The outrageous nondisclosure policies detailed in the hedge fund offering documents cause these investments to be, at a minimum, inherently impermissible for a public pension, such as ERSRI, if not illegal."
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Heightened Risks Related To Hedge Fund Offshore Regulation And Custody

 
"There is no evidence the State Investment Commission was aware of, or ever considered, the unique risks related to foreign regulation of hedge funds."
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SEC Should Investigate Questions Surrounding ERSRI’s Point Judith Venture Investment

 
"The Treasurer has made numerous public statements regarding the performance of the Point Judith II fund she formerly managed and sold to ERSRI, as well as released summary performance figures which are strikingly divergent. [...] In order to prevent any possible confusion or misleading of investors, the SEC should investigate Point Judith II performance claims."
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Rhode Island Ethics Commission Opinion And “Blind Trust” Fail to Address Conflicts Regarding Point Judith Investment

 
"The Treasurer notably failed to mention in her letter to the Ethics Commission that the state was a limited partner in the Point Judith fund and may have broad rights in the fund that conflict with hers. Further, she may have special rights that permit her to profit at the state’s expense."
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SEC Should Investigate ERSRI Investment Consultant Conflicts, Payments From Money Managers

 
"The investment consultant retained to provide objective advice regarding alternatives, Cliffwater LLC, has disclosed in its SEC filings that it receives compensation from investment managers it recommends or selects for its clients, including Brown Brothers Harriman which manages $272 million for ERSRI."
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“Pay To Play” Placement Agent Abuses at ERSRI

 
"Rather than undertake an independent investigation in response to an SEC inquiry, ERSRI relied upon its then investment consultant, PCG, for objective advice regarding controversial placement agent fees—at a time when PCG itself was embroiled in a national pay-to-play scandal."
 
 

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