The University publicly announced yesterday it could be a victim of financial fraud involving $15 million of its operating funds held in a short-term enhancement account. University Chief Financial Officer Sherideen Stoll announced at a meeting yesterday morning with reporters that’ $15 million was invested with Westridge Capital Management, Inc., a California-based company that is under federal investigation. The Securities and Exchange Commission and the Commodity Futures Trading Commission filed enforcement actions against Westridge Feb. 25, freezing its assets pending investigation. A receiver has been appointed to assess the actions of the company’s money managers Stephen Walsh and Paul Greenwood and to develop a document allocating distribution of funds. However, the University may have seen hints something was wrong. On Friday, Feb. 13, the University received a call informing them the National Futures Association, which oversees U.S. investments and market integrity, was taking action against Westridge. Three days later the University filed a liquidation request to cash out their investment, automatically freezing the funds. The University has no access to the $15 million, which was invested with Westridge as part of a short-term measure earning interest on money the University has acquired over time from tuition and fee dollars and all the institution’s resources, including state funds, Stoll said. ‘We are cautiously optimistic that the funds will be returned,’ said Dave Kielmeyer, director of communications, in a release sent out at noon yesterday. ‘The University is moving aggressively to recover its assets.’ President Carol Cartwright sent out an e-mail to faculty and staff at 11:10 a.m. yesterday explaining the situation as a waiting game. ‘I want to assure you that we are aggressively working to protect the University’s interests,’ Cartwright said in the e-mail. ‘I will keep you apprised as this situation evolves.’ Stoll said the funds will not affect day-to-day operations of the University and she doesn’t know when they will regain access or learn if and how much money will be lost. She also said the construction of the Wolfe Center for the Arts and other capital projects will not be affected. ‘There’s so much unknown,’ Stoll said. Heartland Investment Associates, the University’s investment advisor for eight years, recommended the University invest in Westridge, which has handled University money since February 2008, Kielmeyer said. Heartland oversees $160 million of the University’s funds, $130 million in investments and $30 million in cash, he said. Kielmeyer said Heartland looks at the University’s goals and brings findings to the investment committee, which then brings an action before the board of trustees for approval. The University is currently reviewing its relationship with Heartland, but no action is being taken at this time, he said. Stoll said she doesn’t expect to hear any updates for at least 90 to 120 days and the investigation could take years. She foresees the entire investment industry is going to see some big changes in the form of tighter regulations to appropriately safeguard funds. ‘It’s never appropriate for people to be engaging in criminal activity, regardless of this economy,’ she said. ‘The financial system depends on trust so it’s very, very serious.’