A very big gamble
The Chronicle of Higher Education has an extraordinary piece about how one investment manager gambled away $13.1 Million of her university’s money:
Over a series of three contracts, Ms. Prizevoits signed over more than $8-million of the 96-year-old university’s money in 2008 to a Florida-based company called Betts and Gambles Global Equities LLC, to invest in collateralized-mortgage obligations. The founder of the company, federal-court documents state, instead spent part of the money on a Ferrari, a Maserati, and real estate.B y 2010, Ms. Prizevoits had become suspicious of the investments she had made with Betts and Gambles, documents state. Even so, she made another questionable investment on behalf of Ball State, sending $5-million to a California company, Blackhawk Wealth Solutions Inc., to invest in fixed-income securities called Treasury Strips. Much of that money flowed to another company, and was then used to buy a series of real-estate properties in the Bronx, N.Y.
Really does seem bizarre that anyone would do this and that they would manage to gamble away quite so much money without anyone noticing.
I would have thought through that the name of the company might have been a pointer to the problems to come: “Betts and Gambles Global Equities” should at least have raised an alarm bell?