Saturday, 25 March 2017
Last updated 23 hours ago
Aug 25 2010 | 12:18pm ET
Connecticut’s attorney general has sued the former endowment chief at Wesleyan University for allegedly setting up and running a hedge fund while on the school’s payroll.
The lawsuit accuses Thomas Kannam of misusing, “at a minimum, tens of thousands of dollars in university assets” to benefit several companies with whom he had ties, including hedge fund Cross Border Capital Advisors, which Kannam founded in 2001. The lawsuit from Conn. Attorney General Richard Blumenthal—who is running for the state’s U.S. Senate seat—follows similar litigation filed by Wesleyan against Kannam in January, now in arbitration. Kannam was fired by the Middletown school in October.
In its lawsuit, Wesleyan claimed that Kannam’s “outside employment” was “in breach of his duty of loyalty, his employment agreement and the university’s conflict of interest policy.” The school said that “a significant portion” of the phone calls Kannam made from his university office, as well as a majority of his e-mails, dealt with his “personal entrepreneurial ventures.”
Blumenthal further alleges that Kannam billed the university for his business-related travel, including the “golf outing of the century” in California and a trip to the Super Bowl.
Kannam has denied any wrongdoing, and his lawyer blasted Blumenthal’s suit.
“There’s no need for the attorney general to file this, what I call a ‘me too’ lawsuit, on behalf of an institution as large and powerful as Wesleyan,” Stephen Fitzgerald, Kannam’s lawyer, told Bloomberg News. “Alumni, faculty and students should also be distressed that the university’s leadership has chosen to spend thousands of dollars in legal fees on a case that will ultimately produce million- dollar counterclaims against the school by those whose reputations have been severely injured by Wesleyan’s reckless allegations.”
Wesleyan said it “shares the concerns expressed by Mr. Blumenthal and we remain ready to help.”