The largest public pension fund in Mississippi has sued Apollo Global Management, one of the world’s biggest private-equity firms, alleging the company misled investors about the depth of its ties to the late financier and convicted sex offender Jeffrey Epstein.
According to The Lever, the Public Employees’ Retirement System of Mississippi has accused Apollo of downplaying its connections to Epstein. The independent outlet reported the filing in a May 19 story by journalist Veronica Riccobene.
The suit revives long-running questions about how Apollo, its co-founder Leon Black, and other figures on Wall Street handled their relationships with Epstein both before and after his 2019 death in a federal jail, where he had been held following his arrest on child sex-trafficking charges, according to CNBC.
The Apollo-Epstein connection
The relationship between Apollo’s former leader and Epstein is a matter of public record. In January 2021, an independent review commissioned by Apollo’s board and conducted by the law firm Dechert found that Black had paid Epstein $158 million for work performed between 2012 and 2017, according to CNBC’s report. Dechert found that Epstein had regularly advised Black on trust and estate planning, tax issues, and other operations of his family office, according to CNBC. The review reported that it found no evidence Black was involved in Epstein’s criminal conduct.
Black, who helped found Apollo more than three decades ago, stepped down as the firm’s chief executive in 2021 as scrutiny of his dealings with Epstein intensified, according to CNBC. Black has denied wrongdoing and has said the payments were for legitimate financial services.
The new lawsuit, brought on behalf of the Mississippi retirement system, accuses Apollo of downplaying its ties to Epstein, according to The Lever.
Why a pension fund is involved
The Public Employees’ Retirement System of Mississippi manages the retirement savings of hundreds of thousands of current and former state and local government workers, including teachers, police officers, and other public employees. Like many large institutional investors, it holds stakes in publicly traded companies and can file securities litigation when it believes disclosures to shareholders were inaccurate or incomplete.
Public pension funds frequently serve as lead plaintiffs in shareholder cases because of the size of their holdings and their fiduciary duty to protect members’ assets. Such suits typically argue that a company’s statements, or omissions, affected its stock price and harmed investors who relied on them.
What the case could surface
Litigation of this kind can compel companies to turn over internal records through the discovery process, a common feature of shareholder lawsuits that seek to establish what corporate officials knew and when.
Apollo said in a 2021 news release that the Dechert review found the firm had never retained Epstein for any services and that he never invested any funds managed by the company, according to CNBC. The company manages hundreds of billions of dollars in assets across private equity, credit, and insurance.
The reporting on the Mississippi filing appeared alongside other items in The Lever’s weekly roundup, Lever Weekly. As of publication, the litigation was in its early stages.
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