The Morning Report
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So I just got back from the county employee pension system’s new digs in Mission Valley.
The board of trustees that oversees the county retirement system was having a workshop meant to explain to the public its decisions to invest in hedge funds and really clear the air on the issue.
More on that in a minute. One point though: They should never assign such a task to their chief investment officer again. It was rather numbing. The best was his point that if you take more risk investing you get return. I kept waiting for him to point out what else can happen when you take more risk.
The major news to come out of the meeting was the fact that the board decided to hire the lawyer firm Bernstein Litowitz Berger & Grossman – no small fish in the legal world. It looks like the county pension system is going to sue Amaranth, the hedge fund that collapsed last month, causing the county pension system to lose what it now estimates is $105 million.
Well, let’s be clear, they’re going to think about suing. Bernstein Litowits will “evaluate and, if appropriate, prosecute potential legal claims arising from the recent developments with the Fund’s investment in Amaranth.”
I had a chance to chat with County Supervisor Dianne Jacob during a break. I asked her if the pension system has any way of getting money out of Amaranth without suing.
“It’s questionable,” she said.
The lawyer that will be working with the county pension system is Sean Coffey, the lead trial lawyer in the class action suit that was filed against WorldCom after that company’s Enron-esque implosion.