Tuesday, 25 October 2016
Last updated 10 hours ago
Jan 13 2010 | 11:56am ET
Connecticut’s attorney general has launched an investigation into Wesleyan University’s former endowment chief, accused by the school of building a hedge fund career on its dime.
Richard Blumenthal said he’ll look into the school’s lawsuit against Kannam to see if he misappropriated any of Wesleyan’s money.
“If any misused monies consist of contributions to endowment funds or other charitable purposes, we would have authority and certainly responsibility to investigate,” Blumenthal told Bloomberg News.
A lawyer for Kannam said that Blumenthal, a Democrat who is running for the U.S. Senate seat being vacated by Sen. Christopher Dodd, won’t find anything.
“There’s not a single allegation in their complaint that Wesleyan’s endowment money was either misappropriated or inappropriately invested,” Stephen Fitzgerald told Bloomberg. “That’s because it didn’t happen.”
Wesleyan has sued Kannam for breach of contract, alleging that he “defrauded the university of thousands of dollars” while working to set up a hedge fund called Cross Border Capital Advisors. Kannam later, in 2006, joined Belstar Group as director of investment. He was fired by the Middletown, Conn., school in October.
“Kannam leveraged his employment at the University for personal gain in his entrepreneurial ventures and bragged to Ralph Gill”—his partner at Cross Border—“‘The power of wearing two hats is key—our secret weapon,’” the lawsuit alleges.
Kannam's Cross Border Capital Advisors is not related to London-based hedge fund CrossBorder Capital.