Tuesday, 30 August 2016
Last updated 5 hours ago
Nov 27 2013 | 10:55am ET
A hedge fund manager facing a Securities and Exchange Commission fraud probe has resigned as adviser to the New Haven, Conn., Police and Fire Pension Fund Retirement Board.
The $330 million pension on Monday accepted the resignation of Lawrence Gray. The SEC is looking into whether Gray improperly moved $64 million from an Atlanta pension fund to his Gray & Co. hedge fund, and New Haven's outgoing mayor, in a report to his successor, notes that Gray has "encountered personal financial difficulties in recent months." To be exact, "he had had liens totaling $425,000 filed against his home by the IRS, and owes $1 million after settling a lawsuit that accused him of fraud."
The New Haven pension has $7 million invested with Gray, who has served as its adviser since 1999.
Despite the controversy, Gray maintained some support in New Haven, notably from pension chairman and fire department union chief Jimmy Kottage. Kottage noted that Gray's troubles in Atlanta stemmed from his failure to disclose his dual role as adviser and money manager.
"Larry's been our consultant for over 12 years," Kottage said. "He's done a wonderful job."
Kottage told the New Haven Independent that he does not expect to redeem from Gray's hedge fund, which he called "a good, prudent investment that we're expecting good results from." Kottage added that the fund has returned 12% over the past year.