HARRISBURG -- The former chief investment officer at the $26 billion State Employees' Retirement System is alleged to have used state resources for making personal investments and withheld information about investment losses, according to documents obtained by the Pittsburgh Post-Gazette.
Anthony Clark, the pension fund's former chief investment officer, retired Dec. 31. He has not been charged with any crime, and an attorney for Mr. Clark has denied any wrongdoing. Before Mr. Clark's departure, he was paid an annual salary of more than $270,000, according to a state employee salary database.
The SERS board, at its December meeting, voted to authorize its internal audit division to provide an assessment as to how to proceed in light of the allegations.
The documents outline allegations made by a SERS employee, and focus on two areas. One involves "personal 'day trading' activities [Mr. Clark] was possibly conducting from his commonwealth computer, and possibly with the benefit of information he was securing from SERS investment personnel," according to correspondence between SERS and the state Office of General Counsel.
A second accusation centers on "Mr. Clark's alleged failure to adequately advise the SERS Board, both pre- and post-Board decision, concerning a failed SERS investment held by Tiger Asset Management," the documents say.
It is not clear who the employee is, but she is an attorney at SERS.
The whistle-blowing attorney first expressed concerns about Mr. Clark to a SERS board member in April, 2013.
"I am telling you this because my retirement money and every other current and former state employees' money is being managed by someone I believe is untrustworthy. What will he say or do when something really problematic happens?" the employee wrote in an email.
Additionally, "the attorney spoke with a multitude of SERS investment personnel concerning the allegations of Mr. Clark's 'day trading,' " and reported her concerns to the acting chief counsel for SERS in July 2013.
The attorney further emailed a board member in October 2013, concerning how Mr. Clark had briefed the board on what the employee stated was a $3 million investment loss, suggesting follow-up questions board members should be asking.
Mr. Clark "failed to update the board about the estimated losses as of the end of the third quarter that were available to him but he chose to omit that in his correspondence with you. (These losses are approximately $3 million.) He also failed to mention that administrative costs that SERS has paid to date for the fund. (Which are approximately $1 million.)," the employee wrote.
Mr. Clark was informed of the employee's allegations by the SERS board chairman, Nicolas Maiale, on Dec. 2, against the advice of top SERS attorneys, according to the documents.
"Though I acknowledge that these claims have not been independently proven, it is worthwhile noting that these claims originate from professional SERS staff and include explicit details," Mr. McCord said in a letter last month calling on Mr. Maiale to step down as board chair.
The documents, from the state's Office of General Counsel and from an outside law firm to SERS board members, recommend SERS "conduct a thorough internal investigation."
Kate Giammarise: firstname.lastname@example.org or 717-787-4254.