ALBUQUERQUE – The New Mexico Supreme Court has agreed to hear an appeal involving two lawsuits that allege corruption in state investment practices.
The lawsuits were filed on behalf of taxpayers by whistleblower Frank Foy, former chief investment officer for the Educational Retirement Board. He alleged misconduct by the Educational Retirement Board and the State Investment Council in making more than $1 billion in investments.
Foy claimed in the lawsuits that state officials, financial advisers and numerous Wall Street financial firms executed pay-to-play schemes that led to the loss of hundreds of millions of dollars at the expense of the teachers’ pension fund and the investment council.
The Supreme Court sent out its order on hearing the appeal last week but did not explain why it decided to hear the case, the Albuquerque Journal reported.
“This is wonderful news,” Foy said. “If we win on appeal, we could recover hundreds of millions from the big Wall Street firms that cheated our school teachers and schoolchildren.”
The defendants have argued that the investments were above board and legal.
Foy’s lawsuits revolve around more than $22 million in fees paid to Marc Correra by firms seeking investments from the State Investment Council and the Educational Retirement Board. Correra, son of a former close confidant and unofficial adviser to former Democrat Gov. Bill Richardson, received the fees between 2003 and 2009.
In addition to hearing Foy’s appeals, the Supreme Court will also consider a separate appeal from three defendants in the case who argue that they should not be named as defendants because they were public officials at the time the investments were made.