RI Pension Investigator Siedle in NYT for $1M Indiana Settlement, Coming to RI in October

GoLocalProv News Team and Kate Nagle

RI Pension Investigator Siedle in NYT for $1M Indiana Settlement, Coming to RI in October

Edward Siedle
Former SEC lawyer and Forbes columnist Edward Siedle, who has conducted multiple investigations in the Rhode Island pension fund, was featured this week in the New York Times for his recent role in a whisteblowing case involving JPMorgan in Indiana.

"I've been asked if regulators ever take my investigations seriously?  Well, this is just the beginning," Siedle told GoLocalProv.com. "I told regulators they should pay attention to what's going on in Rhode Island."

NYT's Gretchen Morgenson wrote on August 21:

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In a July settlement, the bank paid $950,000 to Indiana, whose officials characterized JPMorgan’s practices as “outside the standards of honesty and ethics generally accepted in the securities trade and industry.”

“There’s no way these state regulators can ferret out Wall Street’s latest crime,” said Edward Siedle, a forensic fraud investigator at Benchmark Financial Services who represented the Indiana informant. “Leveraging the power of the whistle-blower is tremendously helpful, and it’s not costing the state anything.”

Coming to Rhode Island in October 

Siedle will speak at the Crowne Plaza in Warwick on October 12,  where he will review the findings of his completed crowdfunded forensic investigation of state pension fund's real estate investments. 

"Before October, you can expect to see another settlement," said Siedle, following the development inIndiana. "We're now firmly in the era of where regulators are receptive to industry insiders who can utilize and share their knowledge." 

Siedle noted that he will be coming out with a book shortly, as well. 

"The book I'm working on his "How to Steal a Lot of Money," said Siedle. "I wrote articles with that headline, and someone seriously got in touch with me and said they wanted more info, and I thought it was funny. I've actually got a series of emails with this person. So I said -- that's the fiction that lead to truth."

"[Rhode Island Governor] Gina Raimondo will be in the book," said Siedle. "It's the section about how you don't have to make money for a client to be a successful money manager." 

RI Public Pension Reform: Wall Street's License To Steal

Treasurer’s Lack of Transparency

 
"There has been a sinister pall of secrecy regarding fundamental investment information orchestrated by state officials and aided by key investment services providers. "

So-Called Pension Reform Scheme Permanently Reduces Benefits To Retirees

"Whether retirees receive any COLA will depend upon both ERSRI’s funding level and the Fund’s actual investment returns—both of which are volatile, unpredictable and subject to manipulation by elected officials and others. The manipulation of both of these key goalposts has already begun. "

SEC Should Investigate ERSRI’s Failure to Disclose Skyrocketing Investment Expenses 

 
"The Treasurer has intentionally withheld information about soaring investment fees which is material in assessing both whether ERSRI should invest in costly alternative investments and whether benefit cuts are necessary to improve pension funding."

Lose-Lose: Alternative Investments Both Reduce Returns and Increase Risk 

 
"The Treasurer’s representations regarding the level of risk related to ERSRI’s hedge fund investments are wholly inconsistent with the hedge fund managers’own words."

ERSRI Agrees To Be Kept In The Dark, Grants Mystery Investors Licenses to Steal and Consents To Potential Nondisclosure Illegalities 

 
"The outrageous nondisclosure policies detailed in the hedge fund offering documents cause these investments to be, at a minimum, inherently impermissible for a public pension, such as ERSRI, if not illegal."

Heightened Risks Related To Hedge Fund Offshore Regulation And Custody

 
"There is no evidence the State Investment Commission was aware of, or ever considered, the unique risks related to foreign regulation of hedge funds."

SEC Should Investigate Questions Surrounding ERSRI’s Point Judith Venture Investment

 
"The Treasurer has made numerous public statements regarding the performance of the Point Judith II fund she formerly managed and sold to ERSRI, as well as released summary performance figures which are strikingly divergent. [...] In order to prevent any possible confusion or misleading of investors, the SEC should investigate Point Judith II performance claims."

Rhode Island Ethics Commission Opinion And “Blind Trust” Fail to Address Conflicts Regarding Point Judith Investment

 
"The Treasurer notably failed to mention in her letter to the Ethics Commission that the state was a limited partner in the Point Judith fund and may have broad rights in the fund that conflict with hers. Further, she may have special rights that permit her to profit at the state’s expense."

SEC Should Investigate ERSRI Investment Consultant Conflicts, Payments From Money Managers

 
"The investment consultant retained to provide objective advice regarding alternatives, Cliffwater LLC, has disclosed in its SEC filings that it receives compensation from investment managers it recommends or selects for its clients, including Brown Brothers Harriman which manages $272 million for ERSRI."

“Pay To Play” Placement Agent Abuses at ERSRI

 
"Rather than undertake an independent investigation in response to an SEC inquiry, ERSRI relied upon its then investment consultant, PCG, for objective advice regarding controversial placement agent fees—at a time when PCG itself was embroiled in a national pay-to-play scandal."
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