RI Divests From 7 of Raimondo’s Hedge Funds, Including Och-Ziff Which Was Hit By SEC with $400M Fine
Thursday, October 27, 2016
As GoLocal reported last month:
According to reports, the favorite hedge-fund of the Gina Raimondo term as General Treasurer will imminently admit to federal corruption charges.
“The admission of guilt...is part of a settlement with the Justice Department and the Securities and Exchange Commission after a complex five-year investigation into graft worth hundreds of millions of dollars, shell companies, oil and diamonds,” reports Bloomberg.
Former SEC lawyer and Forbes columnist Edward Siedle, who has been a staunch critic of Raimondo and Rhode Island's hedge fund investments, said Wednesday that the state should be seeking additional moneys.
"A prudent fiduciary under the circumstances might consider whether to seek to recover for any losses due to miss management or malfeasance," said Siedle.
In 2014, when Och-ZIff came under investigation while Raimondo was Treasurer, GoLocal reported:
The firm Och-Ziff has received millions in fees from the Employee Retirement System of Rhode Island - the board selecting Och-Ziff is chaired by Raimondo.
The state will "fully redeem" positions with Ascend Capital, Brevan Howard, Brigade Capital Management, Emerging Sovereign Group (formerly Carlyle Group), Partner Fund Management, Samlyn Capital, and Och-Ziff Capital Management, said Magaziner's office, "for an estimated $585 million in the coming months."
The reduction in Rhode Island's hedge fund exposure comes following last month's adoption of Magaziner's 'Back to Basics" plan to "refocus Rhode Island's $7.7 billion retirement system on investments expected to provide growth, reduce volatility and strengthen retirement security."
The office announced that so far in the 2016 calendar year, the Rhode Island pension fund has returned 6.20% beating its benchmark by 43 basis points.
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.
Treasurer’s Lack of Transparency
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. "
SEC Should Investigate ERSRI’s Failure to Disclose Skyrocketing Investment Expenses
Lose-Lose: Alternative Investments Both Reduce Returns and Increase Risk
ERSRI Agrees To Be Kept In The Dark, Grants Mystery Investors Licenses to Steal and Consents To Potential Nondisclosure Illegalities
Heightened Risks Related To Hedge Fund Offshore Regulation And Custody
SEC Should Investigate Questions Surrounding ERSRI’s Point Judith Venture Investment
Rhode Island Ethics Commission Opinion And “Blind Trust” Fail to Address Conflicts Regarding Point Judith Investment
SEC Should Investigate ERSRI Investment Consultant Conflicts, Payments From Money Managers
“Pay To Play” Placement Agent Abuses at ERSRI
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