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June 24, 2013
Federal Claims Court Cites Brattle Academic Advisor's Report in Awarding $21M to the Jicarilla Apache Nation

On June 24, 2013, the United States Court of Federal Claims Court found that the United States federal government grossly mismanaged the funds of the Jicarilla Apache Nation (the “Nation”) and awarded damages in the amount of more than $21 million. The Nation had sued the U.S. government for monetary loss and damages related to the government’s breach of fiduciary duty in mismanaging the Nation’s trust assets and other funds. Brattle academic advisor Michael Goldstein provided rebuttal testimony on behalf of the Nation, supported by senior associate Matthew Aharonian.

From February 1974 through September 1992, the Bureau of Indian Affairs (BIA), a department of the federal government, held funds in trust for the Nation and was responsible for the financial management of these trusts. In its complaint, the Nation alleged that the BIA breached its fiduciary duties to the Tribe by imprudently investing the Nation’s funds. The Nation claimed that, among other things, the BIA invested virtually all of Jicarilla’s tribal trust funds in securities with maturities of one year or less, even though this approach was not prudent or suitable given the Nation’s circumstances and needs. Brattle academic advisor, Michael Goldstein, filed two reports on behalf of the Nation rebutting the findings of the government’s testifying expert – especially with regard to the alleged liquidity needs of the Nation and the government expert’s assessment of the fund’s performance over the period.

Judge Francis Allegra agreed with Professor Goldstein on several key points, noting that:

[I]n his report, Dr. Goldstein indicated that his model demonstrated that “a substantial portion of the trust monies could have been invested in longer-term maturities, with little-to-no risk of pre-mature liquidation.”

Judge Allegra further cited Professor Goldstein’s report to support his finding that the government’s analyses of the fund’s performance shed little light on the prudence of the investments made by the BIA, and that these analyses contained material calculation errors.

Dr. Goldstein is a Professor of Finance and Faculty Director for The Stephen D. Cutler Center for Investments and Finance at Babson College. Dr. Aharonian is a senior associate in the finance and litigation practice at The Brattle Group.