McClatchy's pension fund was defrauded by an investment scam involving Westridge Capital Management. So were numerous institutional investors, including the University of Pittsburgh, Viacom, the Iowa Public Employee's Retirement System, the Kern County Employees’ Retirement Association, and the Sacramento County Employee's Retirement System.
News reports of the other victims were widely circulated, but until this week, McClatchy's connection was essentially unknown.
Here is how this story played out.
Over the weekend I looked at the Yahoo! message board and saw that one anonymous poster claimed McClatchy's pension fund had been defrauded out of $77 million. The allegation was so shocking, I first thought it was just a baseless message board rumor.
I decided to run it up the flagpole and see what happens -- Monday morning I titled a blog post "McClatchy pension fund defrauded of $77 million?". The content:
Don't know if it's true but an anonymous poster at Yahoo! message boards says it is.
I'm sure McClatchy Watch readers can flush out the real story. If you have info to put the ugly rumor to rest -- or shed more light on the situation -- post the info in comments, or email me.
The Yahoo! message board poster -- a former McClatchy employee -- emailed me Monday with more details which seemed to confirm the fraud story. He also scanned a copy of Form 5500 where MNI listed $77 million in fraud losses, and emailed it to me.
The next morning -- Tuesday -- I did a followup post including a photo of the Form 5500. (Click here to see the second post.)
The second post was picked up the same day at Meck Deck and The Medium, the Message, and Wednesday at Fitz and Jen.
There were other things going on at the time -- I understand the former MNI employee had been calling MNI's corporate office, pressing for more info on the fraud.
Meanwhile McClatchy went into action, posting details of the fraud on an internal company web site. News & Observer publisher Orage Quarles III emailed N&O employees Wednesday to reassure them their pension was sound, and he referred them to the internal company site.
Later on Wednesday, Dale Kasler published a story on the fraud at the Bee's web site -- his piece was picked up by several outlets around the country.
Also on Wednesday, MNI filed Form 8-K with the SEC with information on the Westridge fraud. (Click here to see the SEC form).
So finally, employees got information about their pension fund that they should have known about months ago. Most of the credit for McClatchy finally disclosing what happened goes to the former employee who sent emails, made the phone calls, and finally got the information he deserved.