White Oak Global Advisors Lawsuit

White Oak Global Advisors faced significant legal challenges when the New York State Nurses Association Pension Plan filed a lawsuit against them. The case was centered around the mismanagement of funds and breaches of fiduciary duties. White Oak Advisors Lawsuit concluded with the firm paying over $96 million in damages.

This article provide in-depth insights about complexities of the lawsuit—examining the events that led to the ruling and its implications for the financial and legal sectors.

What is White Oak Global Advisors?

White Oak Global Advisors LLC is a distinguished investment advisor and private credit firm based in San Francisco. Andre Hakkak is Co-founder & Chief Executive Officer of White Oak Global Advisors.

They specializes in financing small to middle market businesses, employing deep expertise to navigate the unique challenges these enterprises face across various economic and business cycles. It is surprisingly true that they have cultivated a robust global presence, with over 500 professionals operating across 15 offices worldwide.

You know – White Oak Global Advisors has successfully deployed over $20 billion of capital across more than a thousand companies in the U.S., Canada, and Europe. Their services include:

  • Term Loans and Asset-Based Lending
  • Invoice Factoring and Discounting
  • Trade and Supply Chain Finance
  • Equipment and Real Estate Financing
  • Structured and Treasury Management

White Oak Global Advisors Lawsuit

Background of White Oak Advisors Lawsuit

In 2013, the NYSNA Pension Plan entrusted White Oak Global Advisors with the management of an $80 million fixed-income portfolio. All while expecting the firm to act in the best financial interests of the pension’s members.

Russell Niemie, then Chief Investment Officer (CIO) for the pension fund, sent a memo to the pension fund trustees recommending the renewal of White Oak’s investment management contract. This happened one day after he agrees to meet with White Oak regarding a job opportunity.

However, the relationship soured when it was discovered in 2017 that Russell Niemie, the then-chief investment officer of the NYSNA Pension Plan, was involved in undisclosed job negotiations with White Oak while overseeing the pension’s investments managed by the firm.

It was July 21, 2018 when te pension fund filed for arbitration seeking relief that included “withdrawal and return of its investment” due to the conflict of interest and breach of trust.

Reasons Behind White Oak Advisors Lawsuit

The lawsuit was filed in 2018 after the pension plan uncovered the conflict of interest involving Niemie, who recommended the renewal of White Oak’s management contract under suspicious circumstances.

The arbitration process began, focusing on accusations of fund mismanagement and fiduciary breaches by White Oak. The arbitration panel found White Oak guilty of mishandling funds and violating the Employee Retirement Income Security Act (ERISA). This led to a significant financial award against the firm.

Barbara J.S. McKee, Managing Partner and Co-founder of White Oak Global Advisors, acknowledged the court’s decision and mentions considering all available options, including an appeal. However, David Schaefer, spokesman for Covington & Burling (attorneys for the New York State Nurses Association Pension Plan), was not available for any comment.

White Oak Global Advisors Lawsuit

Legal Findings and Consequences

In 2019, the arbitration panel ruled in favor of the NYSNA Pension Plan, awarding more than $96 million in damages. This decision was later affirmed by the U.S. District Court in March 2021. For sure, it solidified the arbitration award and mandating White Oak to make the payment, which was completed on August 4, 2021.

It is worth noting that the request from the pension fund to add management fees to the award was denied. So – White Oak only payed the arbitration award approved by Judge Lewis A. Kaplan.

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Quick Summary

In a recent ruling in the private sector, a federal judge in New York upheld the majority of a $140 million arbitration award to the New York State Nurses’ Pension Plan. The court found that White Oak Global Advisors, the plan’s former investment adviser, had breached the Employee Retirement Income Security Act (ERISA) by engaging in self-dealing practices with the pension plan.

Frequently Asked Questions

What is the White Oak Global Advisors lawsuit about?

The White Oak Global Advisors lawsuit involved allegations against White Oak Firm, such as fraud and misappropriation of client funds. It focused on negligent management of client assets, undisclosed conflicts of interest, and misleading investment information. The lawsuit was initiated on July 31, 2018, by the Trustees of the New York State Nurses Association.

What were the main findings of the arbitration regarding the ERISA case?

The arbitrator found White Oak guilty of ERISA violations for not disclosing their employment discussions with Russell Niemie, the Pension Plan’s CIO, to the pension fund’s board of trustees. This lack of transparency was deemed a breach of fiduciary

Which court was overseeing White Oak Global Advisors Lawsuit?

The case was handled by the U.S. Court of Appeals, Second Circuit, following proceedings in lower federal courts. White Oak was represented by Eamon Paul Joyce and Carter G. Phillips Esq.

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