DATE: May 28, 2009

TO: The IPERS Investment Board

We want to report that the court-appointed Receiver in the Westridge Capital case filed its initial report. In the 300-page report, Robb Evans & Associates LLC detailed their activities and findings since being appointed as Receiver in February by the Federal Judge overseeing the case. A copy of the Receiver’s report is available at:
http://www.robbevans.com/pdf/wgtradingreport01.pdf.

The Receiver’s primary focus to date has been identifying and, in some cases, liquidating assets available for distribution to investors. The report confirms that there are substantial assets available for distribution—just under $1 billion. The report, however, estimates the total value of investors’ claims at approximately $1.5 billion.

The report provides a detailed analysis of transactions reaching back 10 years. It also provides details of transactions relating to a Westridge entity, WGTI, and its principals, Paul Greenwood and Stephen Walsh, that are at the heart of the regulator’s case.

IPERS invested nearly $500 million in another Westridge entity, WGTC. The report confirms that the IPERS WGTC investment should have a current value of just over $291 million. The report noted that the Receiver will submit a proposed “claims verification” process to the Court in late June, and the Receiver anticipates making recommendations regarding the distribution of assets sometime thereafter.

The report offered no real surprises. We are pleased that the Receiver has recovered substantial assets, and we must await the plan of distribution to determine the extent of our losses.

In the meantime, IPERS, working together with the Attorney General’s Office, will continue to do everything we can to assist the regulators and to maximize our recovery. We are fully engaged with the Receiver in these processes.