Settlement reached in NM pay-to-play case
NM investment agency settles with advisory firm that was sued in pay-to-play lawsuit
SANTA FE, N.M. (AP) -- New Mexico's Investment Council has reached a $643,000 settlement with a financial consulting firm that was sued for steering government investment business to political supporters of former Gov. Bill Richardson.
Council spokesman Charlie Wollmann said Monday that the defunct Dallas-based firm Aldus Equity Partners and three of its officials agreed to pay the money. They also will cooperate with agency efforts to recover damages or losses from investments allegedly awarded because of political pressures.
The proposed settlement must be approved by a state court.
Aldus advised the council on making some investments, including in private equity funds. The council sued the firm and others, including former state investment officer Gary Bland, for an alleged pay-to-play scheme that rewarded Richardson political contributors with deals for investing state money. The agency also contends a broker with ties to Richardson received millions in fees for helping companies obtain investment business.
No charges have been filed. Richardson, Bland and others have denied wrongdoing.
Aldus co-founder Saul Meyer pleaded guilty in 2009 to securities fraud in a separate New York case involving a pension fund there. Aldus was fired by the council and a New Mexico pension fund after being implicated in the New York scandal.
If the settlement is approved, Wollmann said, the state will drop Aldus and its partners as defendants in current or future lawsuits over the investment allegations.
Aldus will pay $500,000 under the proposed settlement, while $120,000 will come from two partners — Matthew O'Reilly and Richard Ellman. Meyer will provide $23,000, which will be in addition to $127,000 in fees that he refunded to the council several years ago.
Quick court approval of the settlement is not likely.
In a separate case involving state investments, District Judge Stephen Pfeffer last week declined to approve a $24 million proposed settlement with a Chicago-based financial firm, Vanderbilt Capital Advisors. Pfeffer put the case on hold until the state Supreme Court resolves a dispute about whistleblower lawsuits brought on behalf of taxpayers by Frank Foy, the former chief investment officer for the educational pension fund.
Another district judge in Santa Fe decided Monday to hold a hearing later on possible settlements with several placement agents that helped broker investment deals.
Foy has alleged a pay-to-play scheme influenced investment decisions by the Educational Retirement Board and the Investment Council.
