Mass. Pension Sues Fletcher Auditor

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.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

The healthcare sector went on a tear beginning in 2011, thanks in large part to the passage of the Affordable Care Act and its impending implementat