Correction Appended
Wesleyan University has filed a lawsuit against Thomas Kannam '87 Tu'92, the University's former vice president of investments and chief investment officer. Kannam, who also previously managed portfolios for Dartmouth's endowment, faces multiple charges including statutory theft and breach of employment agreement, according to Michael Harrington, an attorney for Wesleyan.
The University officially filed charges in November against Kannam, according to the State of Connecticut Judicial Branch web site.
Kannam could be forced to repay several million dollars to Wesleyan should he lose the lawsuit, according to Inside Higher Ed. Wesleyan has applied for prejudgment remedy of $3 million a guaranteed payment to Wesleyan in the event the court were to find fault against Kannam.
Kannam left his position at Wesleyan in October 2009 after the allegations of misconduct came to light, according to Harrington, who said that the departure was "involuntary."
According to the suit, Kannam began a series of entrepreneurial ventures outside of his job at Wesleyan while simultaneously managing Wesleyan's portfolio. Kannam's involvement with these outside endeavors breached his employment agreement with the University and also violated Wesleyan's conflict of interest policy, according to BusinessWeek. The complaint cites Kannam's e-mail history as evidence.
The plaintiffs allege that Kannam created a hedge fund vehicle with associate Ralph Gill in 2001 called Cross Border Capital and joined Belstar Group, an investment funds group, in 2006. They also contend that he became involved with Vietnam Capital Partners and Advanced Device Technology and, according to Inside Higher Ed, signed a number of documents under his wife's name. Wesleyan's complaint states that Kannam actively hid these affiliations and also charged business expenses incurred by these endeavors to Wesleyan.
The suit also alleges that Kannam used proprietary information from his job at Wesleyan to assist his other business endeavors, according to Inside Higher Ed.
The complaint names 17 additional defendants including Kannam's wife, friends and business associates who are being charged for unjust enrichment and unfair trade practices, according to Harrington.
The complaint notes that Kannam was one of the highest paid administrators at Wesleyan, BusinessWeek reported.
"One of the damages we're seeking is his salary and he was very well compensated," Harrington said.
Attorney Stephen Fitzgerald, who represents Kannam, his wife Heather Kannam '87 and Advanced Device Technology, a corporate defendant, told The Dartmouth that his clients have denied all of the charges.
"The allegations that Wesleyan has filed are full of misunderstandings and exaggerations based upon reading e-mails between [Kannam] and his friends and [Kannam] and his wife," Fitzgerald said. "If this matter goes to a hearing, then we will look forward to putting on our defense at that time."
David Pesci, director of media relations at Wesleyan, declined to comment, explaining that Wesleyan does not comment on pending litigation.
Kannam had worked for Wesleyan since 1998 when he was hired as director of investments. He had been praised for boosting the endowment in the early 2000s, according to Inside Higher Ed.
In the 12 months prior to June 30, Wesleyan experienced a record 24 percent drop in its endowment, BusinessWeek reported.
Prior to 1998, Kannam managed portfolios in the Exxon Pension Fund and for Dartmouth, according to the YMCA Retirement Fund, for which Kannam once served on the Board of Trustees.
A conference with the court, in which the defendants and plaintiff will meet to discuss the claims, is scheduled for Feb. 22, Harrington said.
