2009-06-24 14:48:05 -

Jones, Snead, Wertheim & Wentworth, P.A. (“The Jones Firm”) and the National Education Association of New Mexico, Inc. (NEA-NM) today announced that the state court in Santa Fe unsealed an action against Austin Capital Management Ltd. (“Austin Capital”) on behalf of the New Mexico Educational Retirement Board (ERB) and the State Investment Council (SIC), seeking to recover approximately $25 million in losses of public money resulting from Austin Capital’s investing in funds managed by admitted fraudster Bernard L. Madoff (“Madoff”).

NEA-NM brought the action as the so-called qui tam plaintiff under the New Mexico Fraud Against Taxpayers Act, which permits private parties to seek recovery of losses of public money.

The complaint charges Austin Capital with having ignored several red flags that

should have kept it from placing money with Madoff and with having failed to disclose its longstanding business relationship with Madoff. Austin Capital is a limited partnership that oversees hedge fund investments.

Unbeknownst to clients like the ERB and SIC, Austin Capital had invested approximately 7.5% of its funds in Madoff-managed investments and allegedly failed to perform an investigation into the associated risk, a process known as due diligence.

“We wanted our general counsel to bring this lawsuit to do whatever we can to insure the integrity of the teacher and public school retirement system,” said NEA-NM President Sharon Morgan.

“This case is about Austin Capital’s not doing their homework on Bernie Madoff,” said attorney John Wertheim. “Our investigation appears to be unique in having uncovered Austin Capital’s longstanding relationship with Madoff, one reason they missed the red flags.”


The ERB is a retirement fund for New Mexico’s public school employees, and the SIC is charged with investing the State of New Mexico’s permanent funds.

NEA-New Mexico is a union providing professional development and collective bargaining services to over 8,000 members who are public school teachers and employees.

Established in 1948, The Jones Firm specializes in complex litigation for plaintiffs and has served as general counsel to NEA-New Mexico since 1968. The Jones Firm’s web site ( www.thejonesfirm.com : ) has more information about the firm. More information about NEA-NM is available on the web site: www.nea-nm.org : .


The Jones FirmAttorney John Wertheim505-982-0011