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SALT LAKE CITY (AP) -- Richard L. Cherry has stepped down as the chief investment officer of the Utah Retirement System after an investigation concluded he violated ethics policy when he used information on the fund's investments to make his personal investments.
Cherry's departure was effective Wednesday and was under a negotiated settlement, officials said at a legislative oversight committee hearing.
He has been replaced, at least temporarily, by Bruce Cundick, the assistant chief investment officer.
An internal investigation concluded that Cherry's personal investment activities did not harm the $11.5 billion fund representing the pensions of 146,000 current and retired state and local government employees.
The investigation was conducted for the Utah Retirement System by the law firm of Parr, Waddoups, Brown, Gee & Loveless, which found no wrongdoing by other fund managers.
Under the settlement, Cherry will receive payment for hundreds of hours of accrued vacation and sick leave in exchange for waiving a potential wrongful termination lawsuit.
The investigators said Cherry on several occasions made personal stock purchases and trades on the same day that the retirement system bought or sold much larger blocks of the same stocks.
Cherry and his attorney could not be reached for comment.
However, attorney Francis Wikstrom said his client was the victim of character assassination and had lost about $1,900 on the investments.
The actions also are being investigated by the state Division of Securities and federal Securities and Exchange Commission.
In the meantime, the URS Board has taken steps to strengthen conflict-of-interest and ethics polices.
New policies ban the investment staff from working outside the agency as financial advisers, consultants or owners in investment firms. They require executives and professional advisers to provide annual reports on their personal investments and they prohibit key employees from making personal investments within a week of certain URS trading activities.
(Copyright 2003 by The Associated Press. All Rights Reserved.)
