Fire, police pension board may sue over funds

April 03, 2009|By Annie Linskey | Annie Linskey,

Baltimore City Council President Stephanie C. Rawlings-Blake called Thursday for the city's fire and police pension board to sue to recover funds lost in the Bernard L. Madoff financial scandal.

The pension fund lost about $3.1 million after a hedge fund in which it was invested, Union Bancaire Privee Asset Management, placed money in another fund that invested with Madoff.

During a council meeting she called to discuss the matter, Rawlings-Blake pointed to a recent Wall Street Journal article that alleges UBP researchers warned its money managers not to do business with Madoff.

Those warnings were not heeded, according to the article.

"There is credible information that UBP managers had known that this was not a sound investment," Rawlings-Blake said. "We will stand up and take action to protect the fire and police board."

Thomas P. Taneyhill, executive director of the fire and police pension trustee board, said the group is considering legal action but has not made a decision. "We have concerns about risk involved," he said.

The city's public safety pension system still has about $68 million invested with UBP. The system is in the process of pulling out those funds because they "lost faith in their product," Taneyhill said.

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