Media Releases

Update
February 25, 2009

National media outlets are reporting the FBI has arrested Paul Greenwood and Stephen Walsh of WG Trading. The two were principals in Westridge Capital Management, formerly under contract to IPERS. IPERS terminated the contract earlier in February and is seeking return of all assets. IPERS is also pursuing legal action.

“We are encouraged by the action,” stated Donna M. Mueller, CEO of IPERS. “This is an indication that regulators moved quickly to address suspicions and are acting on our behalf.”

IPERS will post updates as additional information becomes available.

February 23, 2009

IPERS terminates Westridge Capital Management contract

(DES MOINES) –The Iowa Public Employees’ Retirement System (IPERS) has terminated its investment management contract with Westridge Capital Management of Santa Barbara, California. IPERS entered into a contract with Westridge in March 2007, following a competitive selection process. Westridge, one of IPERS’ smaller investment managers, has been in business since 1983. The company managed about 2 percent of the IPERS portfolio.

Westridge Capital Management, a registered investment adviser, completes transactions through WG Trading, a registered investment broker-dealer. The National Futures Association (NFA), an organization that regulates its own members, recently suspended the trading capabilities of two individuals who are principals in both WG Trading and Westridge Capital Management.

According to the NFA action, the principals have not provided documents requested by the NFA. The U.S. Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission, regulatory agencies of the federal government, are now investigating WG Trading. These agencies cannot release information during an active investigation. Their involvement provides IPERS added protection as the commissions have the authority to act in ways that will protect investors.

IPERS quickly took the following actions to protect IPERS’ assets:

• Terminated Westridge Capital Management’s contract.
• Demanded the return of all IPERS’ assets, which had an estimated market value of $339 million on January 31, 2009.
• Filed a claim with the NFA for a release from the trading ban so holdings can be liquidated and IPERS’ assets returned.
• Began aiding the Commodity Futures Trading Commission and the Securities and Exchange Commission in their investigations.

These developments do not affect IPERS’ ability to pay benefits, nor do they affect IPERS’ other investments. The IPERS Investment Board and staff continue to follow developments and will take further action, including legal action, if necessary to protect IPERS’ assets. The Investment Board’s policy is to vigorously seek recovery of losses through legal action should losses occur because of fraud. However, IPERS cautions investigations are still underway, and there have been no findings against the company previously under contract to IPERS.