BGSU may be victim of investment fraud
BOWLING GREEN, O.—Bowling Green State University announced today that it might be the victim of an apparent fraud by the principals of Westridge Capital Management, Inc.
BGSU has $15 million invested with Westridge in a low-risk, cash enhancement fund. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have filed enforcement actions against Westridge in federal court in New York, and the U.S. Justice Department has filed criminal charges against the firm’s partners for criminal conspiracy, securities fraud and wire fraud.
A federal district court in New York has ordered all Westridge assets frozen. The court also appointed a receiver to assume control of the assets and funds of Westridge and others and to take actions necessary to protect Westridge clients.
According to BGSU spokesman Dave Kielmeyer, it is too soon to tell how much, if any, of the University’s investment may be lost because of the alleged fraud.
“We are cautiously optimistic that the funds will be returned. The University is moving aggressively to recover its assets,” Kielmeyer said. “Both the University and the office of Ohio Attorney General Richard Cordray have spoken directly with the receiver concerning BGSU’s recovery of its investment. The University will continue to work with the receiver, the Ohio Attorney General and the appropriate regulatory authorities to protect the University’s interests.”
The fund BGSU is invested in was indexed to 90-day U.S. Treasury bills and sought to obtain commensurate returns.
“This was not an aggressive investment,” Kielmeyer said. “It was a very liquid, cash-enhancement fund that was ideal for universities, state and county pension funds and other institutional investors to earn a return on large, short-term investments.”
Kielmeyer added that the apparent fraud would not have any near term impact on the University’s operations or its ability to meet its obligations.
In addition, the University’s Foundation did not have any investments with Westridge.
(Posted March 16, 2009 )