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Equity Firm Agrees to Pay $3 Million to NM State Investment Counsel for Moneys Tied to Pay For Play Scheme

The New Mexico State Investment  Council (“NMSIC”)  announced  this week that  private equity firm Spyder Management has agreed to pay $3 million to settle disputed claims by the state of New Mexico related to the state’s 2005 investment in Silver Creek Ventures II.

“This is a sizeable recovery – an appropriate result for New Mexico taxpayers,” said State Investment Officer Steve Moise. “

The settlement is in relation to  Spyder Management’s receipt of a $9.4 million investment commitment from the NMSIC  in 2005.  As part of the settlement, Spyder will also purchase the remainder of the  NMSIC’s investment at current net asset value.  Spyder Management denies any wrongdoing, and the settlement resolves disputed claims.

The NMSIC has so far secured settlements in excess of $32 million from investment managers and individuals who allegedly manipulated  the state’s investment process for personal gain. In this case, NMSIC  alleged that Silver Creek Technology Investors paid a placement fee to third-party marketer Marc Correra, whose father Anthony was an unofficial advisor to a former New Mexico governor.  The NMSIC has sued more than a dozen entities and individuals in relation to these alleged improper payments.

The New Mexico State Investment  Council NMSIC  In 2009, the New Mexico legislature revamped the structure of the NMSIC in response to various pay for play scandals. The NMSIC currently manages more than $20 billion, including the $14.7 billion Land Grant Permanent Fund, and $4.7 billion Severance Tax Permanent Fund, which provides funding to public schools, universities and the general fund of the state.

Kenneth W. Ritt of Day Pitney, LLP was the lead attorney  representing  the NMSIC in this matter.

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Jennifer Schaller, Esq. is the Managing Director and co-founder of the National Law Review on-line edition.  Prior to the National Law Review, Jennifer most recently served as in-house counsel / director at CNA Surety. She also served in various marketing and business development roles as a vice president of Aon Services Group.  Jennifer started her legal career as an insurance coverage attorney with Smith Amundsen, LLC in Chicago, IL and in risk management at various insurance organizations.

In 2019 Jennifer was the Chair for the Chicago City group of the Legal  Marketing...