TRANSIT WORKERS (ATU)
Richmond Transit Union Seeks Restitution of more than $7 million
to Pension Fund
Amalgamated Transit Union Local 1220 in Richmond, Va., recently
filed suit seeking to recover union pension funds taken by Alan
Bond, a high-profile Wall Street union fund manager who was convicted
June 10 on three counts of investment-advisory fraud and three counts of
mail fraud in federal court in Manhattan."I was very outraged," said Rufus
Cosby, Local 1220 president. The union first invested with Bond after he
was recommended by a consultant in 1997.
The charismatic Bond had risen from a modest upbringing to become a Harvard Business School graduate and regular on PBS's "Wall Street Week With Louis Rukeyser." Yet, this trial wasn't his first brush with the law: at the time of his indictment last year, he was out on bail awaiting trial on an earlier set of fraud charges. Bond managed to remain in business despite the 1999 indictment by persuading ATU bosses in Richmond and Birmingham, Ala. to stick with him. It was those union members' pension funds that Bond raided in the second scheme, for which he will be sentenced on Sept. 9. Cosby, who testified in Bond's trial, said he first learned of the federal case against his pension fund's manager in Aug. 2001. He said he did not inform his members, on the advice of legal counsel. As of June 13, 2002, they still had not been informed. Cosby said he plans to brief them soon. When Bond was arrested in Aug., the value of Local 1220's account he managed had dropped by about $7.3 million during the prior sixteen months, said Asst. U.S. Atty. Steven R. Peikin.
Local 1220 was one of three groups hit by Bond's "cherry-picking" scheme, according to court documents. Allegedly, Bond put successful stock trades made with union funds into his private account, while moving money losers into his clients' accounts. The money helped finance Bond's lifestyle, including 75 classic cars and credit card bills as high as $476,000 in one month. [Richmond Times-Dispatch 6/14/02; Wall St. J. 6/11/02]
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