AKRON - The head of a money management firm indicted in June in the loss of $215 million in Ohio injured-worker investment funds concealed the circumstances of his earlier departure from two bank jobs, the government contends.
Before Mark D. Lay of MDL Capital Management in Pittsburgh was hired to manage Ohio Bureau of Workers' Compensation funds, he lost nearly $1 million in foreign currency trading at Mellon Bank and nearly $800,000 at PNC Bank in 1988-89, prosecutors said in a July 26 filing that was the subject of a hearing Thursday in U.S. District Court.
Prosecutors said the personal background that Mr. Lay gave the bureau did not mention his jobs at the banks.
The information, the government said, "could have alerted the [bureau] to his tendency toward rogue behavior."
Mr. Lay said he wasn't fired from the banks and called his departure a mutual agreement because of differences over his style and volume of trading.
His attorneys said he disclosed his employment history in annual filings with the Securities and Exchange Commission and said Mr. Lay thought a form was forwarded to the bureau.
Mr. Lay was indicted on charges of investment advisory fraud, mail fraud, and conspiracy to commit mail fraud and wire fraud.
His trial is scheduled for Oct. 12.