Simmons Hanly Conroy Obtains Favorable Ruling on Behalf of Iowa Public Employees Retirement System in Ponzi Scheme Litigation

Simmons Hanly Conroy was hired by the Attorney General of Iowa to pursue a $250 million loss suffered by the Iowa Public Employees’ Retirement System (“IPERS”) arising from IPERS’ investment in funds that turned out to have been managed by Ponzi schemers Stephen Walsh and Paul Greenwood and their company Westridge Capital Management. The total loss of all investors approached $1 billion. Shortly after the fraud was uncovered and the SEC and CFTC froze the defendants’ funds, United States District Judge George Daniels appointed a Receiver to marshall the remaining assets in order to construct a plan to distribute the frozen funds to the defrauded investors, including IPERS. After nearly two years of litigation the Receiver proposed a plan of distribution that would have the effect of returning to IPERS more than 90% of its investment. Simmons Hanly Conroy, working closely with Iowa Deputy Attorney General Jeffrey Thompson, argued before Judge Daniels that the Receiver’s plan was the most fair and equitable of the several plans proposed by various investors. On March 16, 2011 Judge Daniels agreed with IPERS and others that the Receiver’s proposed plan should be implemented, and he ordered that an interim distribution of $815 million should commence in 30 days. Of that sum, IPERS is due to receive $215 million, representing 84% of its invested funds. It is expected that further distributions to be made in the future will place IPERS in the position of recovering more than 90% of its net investment, an extraordinary result in Ponzi scheme litigation.