Firm settles with New Mexico over investment deals


SANTA FE, N.M. (AP) — A state court has approved a financial advisory firm's agreement to pay New Mexico more than $600,000 to settle accusations that it funneled public investment deals to former Gov. Bill Richardson's political supporters.

The settlement involving defunct Dallas-based firm Aldus Equity Partners and three of its officials was approved Thursday by District Judge Sarah Singleton.

The firm and its partners acknowledged they were liable to the State Investment Council and said they will cooperate with the agency's efforts to recover damages or losses from investments allegedly influenced by political considerations.

The council manages investments of New Mexico permanent funds valued at about $19 billion. In 2011, it sued the firm and others, including former state investment officer Gary Bland, alleging they rewarded Richardson's political contributors with state investment deals.

No criminal charges have been filed, and Bland, Richardson and others have repeatedly said there was no wrongdoing.

Aldus co-founder Saul Meyer pleaded guilty in 2009 to securities fraud in a separate New York case involving a pension fund there. New Mexico's investment council fired Aldus after the firm was implicated in the New York scandal.

Under the settlement approved Thursday, Aldus will pay $500,000, $120,000 will come from partners Matthew O'Reilly and Richard Ellman, and Meyer will pay $23,000.

The amount from Meyer is in addition to $127,000 in fees that he refunded to the council in 2009.

The settlement was opposed by a lawyer for Frank Foy, a former chief investment officer for the state's educational pension fund. Foy has filed whistleblower lawsuits on behalf of taxpayers that allege a pay-to-play scheme improperly influenced investment decisions by the Educational Retirement Board and the Investment Council.

"I think it's a terrible settlement," Foy said after the hearing.

He complained that New Mexico was "getting the crumbs" because Aldus had settled several years ago with New York by agreeing to pay more than $1 million in restitution.

Assistant Attorney General Scott Fuqua, who represented the Investment Council, said the settlement was "fair and adequate." He said Meyer and Aldus had demonstrated they didn't have the assets to pay more to New Mexico.

Investment Council spokesman Charles Wollmann said the council has now collected about $26 million in settlements with financial firms and placement agents that helped broker state investment deals.


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