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Westridge Capital Management and WG Trading Investors Ponzi scheme may cost Sacramento County's pension system more than $50 million.

Mercury News.com 02/26/09

SACRAMENTO, Calif.—Sacramento County's pension system may have lost more than $50 million in the latest Wall Street scandal.

The owners of an investment firm that manages millions of dollars for the Sacramento County Employees' Retirement System, universities and charities were arrested Wednesday by the FBI.

A federal complaint says $1.3 billion was transferred from the company to one of the owners and the other owner's wife.

Sacramento County's $4.5 billion pension system invested $90 million with Westridge Capital Management and WG Trading Investors in June. The pension system's chief executive, Richard Stensrud, says the recession had cut the investment's value to $57 million before the latest problems arose.

The system recovered $5 million before investigators froze the companies' assets.

Stensrud says pension payouts will not be affected.