Wednesday, 6 May 2015
Last updated 17 hours ago
Jun 5 2013 | 10:27am ET
The three Louisiana pension funds that invested with troubled hedge fund Fletcher Asset Management have sued its administrator and auditor.
The Louisiana Firefighters' Retirement System, Louisiana Employees Retirement System and New Orleans Firefighters' Pension and Relief Fund allege that Citco Fund Services misled them about the Fletcher International Fund's structure and health. The three pensions invested $100 million with Fletcher in 2008, with the promise of a 12% annual return.
According to the pensions, if Fletcher failed to produce those returns, the difference would be covered by $50 million from Citco. In addition, the pensions said that Citco assured them that their investment was gaining value, growing to as much as $125 million.
But when the hedge funds sought to redeem their money, they received IOUs instead of cash. They have since successfully battled to have the Fletcher fund liquidated in the Cayman Islands and to have a receiver appointed in the U.S., but are still likely facing substantial losses.
If Citco has provided "accurate information," the pensions said, they would have "exercised their right of redemption and demanded payment."
As for Fletcher's former auditor, Grant Thornton, which resigned in March 2010 and nine months later admitted that its original audits were not accurate, the pensions allege that "it was complicit in the cover up of the misrepresentations and omissions."
The pensions also named several Citco subsidiaries, Fletcher itself and several executives, as well as Consulting Services Group, the firm that touted Fletcher to the pension funds. The pensions fired that firm earlier this year.
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…