Thursday, 26 May 2016
Last updated 3 min ago
Jan 27 2014 | 11:37am ET
The Massachusetts Bay Transportation Authority Retirement Fund has filed suit against two auditors and a valuation firm over its loss investing with a bankruptcy New York-based hedge fund.
The MBTA fund, which covers employees of the Boston area's public transit system, lost $25 million investing with Fletcher Asset Management. The court-appointed trustee of one of that firm's hedge funds has said it firm resembles a "Ponzi scheme."
And according to the MBTA pension, Grant Thornton, EisnerAmpner and Quantal International should have figured that out before the scheme lost everything. MBTA Retirement alleges that the companies failed to do their jobs properly when vetting Fletcher.
The three "enabled an enormous fraud causing significant damage to the Retirement Fund," the lawsuit, filed in Massachusetts state court, alleges.
Grant Thornton has also been sued by three Louisiana public pension funds that invested with Fletcher. In addition, the trustee, Richard Davis, has accused Quantal of failing to properly value Fletcher's funds.
Grant Thornton has denied any wrongdoing.
"We are confident that our work complied with all professional standards and we intend to vigorously defend ourselves," the firm said.