Wednesday, April 07, 2004
VTA Pension Fund Fraud
In the April 19th issue of Forbes magazine (don't you just love how magazines date their issues?) Neil Weinberg reports:
The Santa Clara Valley Transportation Authority's pension board put out a tough-sounding memo in January, announcing that it was firing Putnam Investments as the manager of its $36 million international equity portfolio. The move had been recommended by the pension fund's adviser, Mercer Investment Consulting, in the wake of Putnam's poor returns and its indictment for securities fraud.
The article also mentions that Putnam and Mercer are owned by the same company, Marsh & McLennan, that Mercer hand-picked Putnam to manage VTA'a international equity portfolio -- one part of VTA's overall pension offerings, and that Mercer receives millions of dollars every year from the managers it supposedly evaluates objectively.
VTA conveniently forgot to mention those facts in its memo, and even claims ignorance concerning them.
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