Friday, May 22, 2009

AG Sues NY Investment firm

More fun with state investments. Attorney General Gary King has filed a lawsuit against The Reserve, a New York company with which the state Treasurer and the NM Finance Authority invested more than $1 billion.

The Reserve has been in the news in recent months. Check THIS and THIS.

It's not clear now whether some of the names involved with other state investment controversies are involved with these investments

Here's the press release from King's office. More on this later.

Attorney General Gary King has filed a complaint and injunction petition on behalf of the State Treasurer’s Office and the New Mexico Finance Administration against The Reserve, a mutual fund company in New York, asking for immediate payment of investment funds and an order to prevent the spending of any investment monies.

Both state agencies have a combined investment of more than a billion dollars in the Reserve's Primary Fund. A request was made in September, 2008 to have the majority of the funds returned to the state, as Reserve was contractually obligated to do, but the company failed to comply. Because of a financial downturn the assets then lost a substantial amount of their value. The AG's office contends the STO and NMFA have been deprived of the fullest value of their assets in the fund due to the delay by the defendant in returning their investment money when requested.

On behalf of the state, the Attorney General is asking the district court to order the Defendant to immediately make payment based on the value of the assets at the time of the request; to award costs and attorneys' fees; and to provide any other relief the court deems appropriate.

Additionally, the AG's complaint alleges that The Reserve has set aside $ 3.5 billion from the Primary Fund for the purpose of paying their legal expenses that includes monies invested by the state agencies. Because of that willful and intentional conversion of assets, the AG's Office is also seeking punitive damages in an amount to be determined at trial.