Hedge Fund Manager To Be Sentenced In Ohio Pension Case

Jul 7 2008 | 7:33am ET

Hedge fund manager Mark Lay will learn his fate tomorrow, when a federal judge is set to sentence him for losing $216 million for an Ohio pension.

Lay, the founder and president of Pittsburgh-based MDL Capital Management, faces as much as 20 years in prison. He was convicted of defrauding the Ohio Bureau of Workers’ Compensation in October, part of a scandal that rocked the state’s political world.

U.S. District Judge David Dowd will hear arguments from both Lay’s attorneys and the government before handing down a sentence. At a Thursday hearing, Lay pleaded his case, denying allegations that he mismanaged the money or tried to hide losses.

“I felt rates would go up and add tremendous benefit to the state of Ohio’s portfolio,” he said. “There were not self-motivating factors or malicious intent.”

According to prosecutors, the huge loss was the result of rogue investing on the part of Lay, who they say invested the money in a highly-levered hedge fund without authorization.

Lay is just one of 19 people convicted in the BWC scandal, which included a bizarre theft from a $50 million rare-coin fund by a top state Republican fundraiser. The scandal is also credited with huge losses for Republicans in Ohio in the 2006 election, including the losses of the governor’s office and a U.S. Senate seat.


In Depth

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Cash: An Asset In Adolescence

Aug 31 2017 | 3:34pm ET

If the investment industry has a rebellious teenager in the house today, that teenager...

 

From the current issue of