MBTA lost $25 million when Fletcher International Ltd, the master fund for the Fletcher group of hedge funds filed for Chapter 11 bankruptcy protection.
“The lawsuit, filed Monday in New York, accuses Fletcher and his firm, Fletcher Asset Management , and other parties of conducting a “long-running fraud” in which they misused money for their own benefit, inappropriately took inflated management fees, and overstated the value of assets.” The Boston Globe said. “The plaintiffs — which include the $1.6 billion MBTA fund, the Fletcher Fixed Income Alpha Fund, and three other Fletcher entities — are seeking $50 million, according to the complaint, as well as management and attorney’s fees and interest.”
According to an internal report, MBTA management is working closely with the Trustee in a collaborative effort to recover damages from both Fletcher and the potentially responsible third parties who enabled him. The MBTA’s investment portfolio achieved a 16.19% gross investment return in 2013, representing more than a $200 million investment gain.
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