US college cheating scandal snares fund sector executives

Jennifer Thompson:

Hollywood actors grabbed the headlines but a clutch of big names in asset management featured in the group of wealthy parents accused of paying millions of dollars to buy places for their children at elite American universities.

Those charged as part of Operation Varsity Blues include Douglas Hodge, former chief executive of investment manager Pimco, John Wilson, former independent member at one of Franklin Templeton’s fund boards, and Bill McGlashan, a former top executive at private equity firm TPG and poster boy for the impact investing sector.

In a criminal complaint filed in Boston, the Department of Justice accused 50 individuals of engaging in a scheme to bribe college entrance-exam administrators and university coaches.

An FBI affidavit filed in support of the complaint listed Georgetown, Stanford and Yale among the eight institutions affected in one of the biggest cheating scandals in US higher education.

Mr Hodge, a Pimco veteran who led the $1.7tn California investment group between 2014 and 2016 before retiring, is alleged to have used bribery to get two of his children into college “as purported athletic recruits” and to have considered the use of bribery to help a third child into college.