Compliance February 25, 2009

Money Manager Fraud Snares Public Pensions

Two managing general partners of WG Trading Co. of Greenwich, Connecticut, have been charged with running an estimated $550 million investment fraud.
Reported by

Reuters reports that Paul Greenwood and Stephen Walsh are accused of using client money as “their personal piggy-bank” to fund lavish spending including a horse farm, multi-million dollar homes, cars, and payments to a former wife. The two have been charged with conspiracy, securities fraud, and wire fraud.

A criminal complaint filed in U.S. District Court in Manhattan alleged the scheme was long-running, beginning in 1996 and still operating through this month, according to Reuters.

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The two also were charged in a separate civil complaint filed by the U.S. Securities and Exchange Commission (SEC), which said the men solicited numerous institutional investors, including educational institutions and public pension and retirement plans, by promising to invest their money in an “enhanced equity index” strategy. Of the $667 million that clients invested, Greenwood and Walsh misused as much as $554 million, the SEC said, according to the news report.

Reuters said Greenwood and Walsh had been suspended by the National Futures Association on February 12 for not disclosing their financial records and failing to answer questions about numerous promissory notes that the association said totaled “hundreds of millions of dollars” that they executed.

A former WG Trading employee, Mark Bloom, was also arrested on Wednesday and charged separately in U.S. District Court in Manhattan with fraud related to his activities at his North Hills Management LLC financial firm in New York. The SEC also brought civil charges against Bloom, saying he misused more than $13.2 million of investor funds in part to support a lavish lifestyle.

Products February 25, 2009

Mercer Launches Online Retirement Planning Tools

Mercer has recently added two personalized online retirement planning tools to its base service offering for defined contribution (DC) plan administration clients.
Reported by

The new tools, MyView and MyView Plus, provide an interface to highlight a participant’s current savings strategy and potential retirement income, according to a Mercer news release.

The MyView Retirement Planner is an online tool that automatically populates certain personal data points that are kept on file by the recordkeeper, such as salary, current account balance, and other demographic-type information. It then allows users to create a variety of financial scenarios by sliding tabs to increase or decrease such inputs as current and anticipated retirement age, annual income, employee contribution rate, employer match, anticipated pension income, and other possible sources of retirement income.

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The MyView Plus Retirement Planner offers greater customization and modeling power for those who want a more in-depth view of retirement income scenarios, the news release said. In addition to the information found in the basic MyView tool, users can input a broad array of investments and assets from accounts other than the workplace DC plan, including spousal savings and income as well as details about post-retirement expenses. Users then receive a detailed chart that compares future income and expenses with total savings and anticipated length of retirement.

Both MyView and MyView Plus reside on Mercer’s secure, password-protected participant Web site, the company said.

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