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New Mexico, Vanderbilt Capital Settle for $24 Million

Feb. 23 (Bloomberg) -- Vanderbilt Capital Advisors LLC agreed to pay New Mexico $24 million to settle claims over pay-to-play and politically motivated investments the state made with the firm, the state said.

The agreement, announced by the New Mexico State Investment Council, said the settlement represents a portion of the investments New Mexico made with Vanderbilt from 2004 through 2006, according to a statement the agency issued yesterday.

“This is a significant recovery of money for the taxpayers of New Mexico, and it demonstrates how diligently this Council has worked over the past two years to bring a measure of accountability following a deeply disappointing chapter in New Mexico history,” Governor Susana Martinez said in the statement.

The state sued individuals and placement agents over claims they were were unjustly enriched through the investments at issue, according to the statement. Vanderbilt would have been a defendant in a second round of litigation against various investment funds, according to the statement.

Vanderbilt, acquired in 2006 by Milan-based UniCredit SpA, “continues to maintain that it did nothing wrong,” Peter Simmons, a lawyer representing the investment firm, said in a phone interview. New Mexico “fully understood the risks inherent in the investments that it made, and there were no improprieties in any payments that were made.”

Vanderbilt settled to “avoid the costs and disruption of continued litigation” and it “made sense to put these historical matters to rest since were able to do so on agreeable terms,” he said.

The case is New Mexico v. Vanderbilt Capital Advisors, D-101-CV-2008-1895, First Judicial District Court, County of Santa Fe, New Mexico.

To contact the reporter on this story: Joel Rosenblatt in San Francisco at

To contact the editor responsible for this story: Michael Hytha at

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