Wesleyan University has brought a lawsuit against former Vice President of Investments and Chief Investment Officer Thomas Kannam and nearly twenty other defendants, alleging breach of fiduciary duty, civil theft, breach of contract, fraud, statutory forgery, and unjust enrichment, among other charges. Kannam was dismissed from his position at the University on October 13. The University filed its suit in the Middletown Superior Court on November 24, requesting a hearing which could force Kannam to put aside a $3 million pre-judgment remedy that would be paid to the University if it eventually wins its case. There was no public announcement, and Wesleyan’s Director of Media Relations, David Pesci, declined to comment.

According to the University’s pleadings, Kannam violated his contract by devoting most of his energies into personal “entrepreneurial ventures,” which diverted his attention away from his duties at Wesleyan. The University also claims that Kannam improperly exploited his privileged access to Wesleyan’s financial information, some of which was proprietary, for his own benefit, and that he used the University’s funds for his own business and personal expenses.

“We deny all of the allegations in the complaint,” said Stephen J. Fitzgerald, Kannam’s attorney. “If there’s going to be a hearing on the pending application for a pre-judgment remedy, we will at that time put on our defense.”

According to the complaint, Kannam began improperly profiting from his position at Wesleyan in 2001, when he and Ralph Gill, an associate, formed Cross Border Capital Advisors, or CBCA. The University released what it claims are some of Kannam’s email correspondences, sent from both his official email address and a personal account he accessed regularly on his work computer, to support its charges.

“Through my portfolio at Wesleyan, I have a window on some very interesting stock ideas,” Kannam allegedly wrote. “If possible I’d like to cherry-pick the best and capitalize on them. Would it be possible to feed Mike’s [Zaninovich] hedge fund and get paid some incentive on the performance of our ideas? Might be the fastest way to some real dough.”

The University claims that around 2006, Kannam became the owner and Director of Investments for the Belstar Group, where he received his own healthcare plan, pension, and corporate credit card, and continued to take advantage of information about Wesleyan’s investments. Belstar’s Managing Partner and Chief Investment Officer reportedly described Kannam as “our critical endowment asset.” The suit also alleges that Kannam took business trips on behalf of Belstar at the University’s expense.

Kannam is also accused of sitting on several corporate boards, including that of his father’s company, Advanced Device Technology Inc., which supplies infrared devices to the United States military, and Vietnam Capital Partners. Wesleyan says that Kannam failed to alert the University President of his involvement in these other boards, which his contract required him to do.

“Another board seat ($=equity)…Whoo, whoo, whoo, whoooooo! They’re adding up,” Kannam wrote in an email to his wife, according to the University.

The University claims that Kannam was aware that his activities represented a conflict of interest, and that he took steps to conceal them. He allegedly created presentations for CBCA under his wife’s name, and, according to the University’s complaint, worked with a partner at Belstar to “draft a letter to the University’s President from an alleged Korean dignitary,” that would conceal his involvement in outside entrepreneurial projects.

“We need to handle this discreetly at Wesleyan since there’s major turnover on our Board now and the new members that are joining take their fiduciary duty seriously in the Sarbanes-Oxley environment,” Kannam allegedly wrote to a CBCA associate in 2005. The Sarbanes-Oxley Act set higher standards for oversight by corporate boards in the wake of the Enron scandal. The suit also argues that Kannam was concerned about the arrival of a new President in 2007, and told his associates that he would have to “lay low.”

When Kannam started working at Wesleyan, his office was located in North College, the main administrative building. The University claims that he lobbied to have the Investment Office moved into its current location at 74 Wyllys Avenue in order in order to conceal his private ventures from his colleagues. The complaint claims that Kannam referred to his office as “The Taj” and used it primarily for his non-Wesleyan business.

The suit alleges that Kannam used a variety of the University’s resources for the benefit of his private ventures. He reportedly offered to have his staff at the Wesleyan Investment Office handle projects for Belstar. In 2007 Kannam allegedly reported that a hedge fund had retained the services of Wesleyan’s Quantitative Analysis Center (QAC), an interdisciplinary data analysis workshop, and that it had agreed to pay a fee of several thousand dollars. This fund was allegedly Belstar, which never paid for the services it received from the QAC. The University claims that Kannam recommended the hiring of several new employees so that he could focus more of his attention on his own ventures. Of one new member of his staff, Kannam reportedly wrote, “I’m so happy. With my extracurricular ventures heating up, he’ll help a lot.”

Finally, the complaint accuses Kannam of fraudulently using University funds for his own expenses on “countless occasions.” The suit alleges that Kannam routinely doctored expense reports to pay for golfing outings, international travel, and even a trip to the 2008 Super Bowl. He allegedly allowed his associates to travel to conferences under the pretense that they were financial advisors to the University. He is also accused of having received “double reimbursement,” when he paid for his expenses using his Wesleyan credit card and then submitted his expenses for cash reimbursement.

The University claims that Kannam’s misconduct was discovered in 2009 and led to his termination, although two days after his departure President Michael Roth sent an all-campus email announcing that Kannam had left to “pursue other opportunities.” The trial has not yet begun, and it remains unclear how the University assembled its case. The Argus will have more updates as new information comes to light.

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  • what I know

    The link above is to the public lawsuit, not the arbitration. Wesleyan got trashed in the arbitration. They have to pay Kannam, not the other way around. This also means the case against all the other people will go nowhere. Wes is not happy and is appealing the arbitration, but that’s almost impossible to do.

    Good this Wes spent all that dough on this.

  • just a question

    From the case detail here:


    it would seem that a ruling just went against Wesleyan. Could someone at the Argus go down to the courhouse and find out what is happening?

  • cls99

    I do know that the AG’s case was thrown out. That was election politics, plain and simple. We are represented by a complete creep.

  • cls99

    Is this case dead? The arbitration must be done by now, I would think.

    Argus? An awfully big deal was made out of this, I would think that some kind of follow up or post mortem would be in order. How much did the University spend and how much did they recoup?


  • David Lott, ’65

    The Argus will report on this case if someone sends it a press release.

  • Not So Legal Eagle

    Any truth to the rumor that the University has dropped its case against Kannam? If so, why hasn’t the Argus reported on this?

  • Attorney General Richard Blumenthal

    Blumenthal’s credibility not to high these days. Mainly because of the following statements he made (when he in fact never served in Vietnam but entered the reserves to AVOID the draft and seek deferrments from active duty).
    “”In Vietnam we had to endure taunts and insults, and no one said, ‘Welcome home.’ I say welcome home.”

    “We have learned something important since the days that I served in Vietnam.”

    “When we returned, we saw nothing like this. Let us do better by this generation of men and women.”

    “I wore the uniform in Vietnam and many came back to all kinds of disrespect. Whatever we think of war, we owe the men and women of the armed forces our unconditional support.””

  • CT attorney general

    Im sure CT attorney general will give it a good fight just like he did in vietnam

  • Brian J. Glenn ’91


    CT’s Attorney General has joined Wesleyan’s lawsuit against Kannam.

  • hmm

    No, and we won’t.

  • Did Wes get the 3 million?

  • not so legal eagle

    Thanks for the clarification!

  • Responder

    A conference is merely to outline how the case will be handled – e.g., calendar, lawyers, due dates, etc.

  • current student
  • current student

    The argus has stated in a new story that the case (or parts of it) might be going to arbitration…

  • not so legal eagle

    I see that a “conference” is set for 4/12. What, exactly, does this mean? Are both sides to make concessions? Can a judgement be rendered if this is merely a “conference”? Please advise!

  • Other Cases

    What kind of damages are Simonetta and Morgan requesting??

  • A Civil Procedure

    Looks like Kannam’s old lady and daddy have jumped on the ‘STAY’ bandwagon.

    125.00 03/26/2010 D MOTION FOR STAY
    as to Defs, Heather McCutchen & Advanced Device

  • Sorry…..

    ….there are no more details, just a few leaked emails……

  • Argus get on it

    We need more details!

  • current student

    anyone know exactly what’s up with the Simonetta case? what’s it about? I know it says “Contracts” in the case description, but what abut it?

  • pre law

    Defendents lawyers are doing the right thing – just practicing due diligence. Too bad Administration didnt practice due diligence ie. Morgan and Simonetta.

  • No Big Deal

    The defendants are just using all tactics afforded to them by the Rules of Civil Procedure. Nothing more, nothing less.

  • not so legal eagle

    Sounds to me that the charges are *not* extraordinarily credible, or else the case would have moved further along by now…

  • More Court Action

    Looks like someone else filed for a stay, but the court record summary does not say who filed.

    Looks like the defendants are trying to slow this whole thing down and place it on the back burner.

    Doubt if it will work though. The charges appear to be extraordinarily credible.

  • Just say’in

    Using ‘Legal Issues Not Mathematical’s’ argument, it would seem that if all the defendants file for a stay, then it should be granted.

  • Logic

    Legal Issues not Mathematical

    Nice try at twisting the argument. Great Non sequitur.

    The issue was case frequency.

  • Legal Issues not Mathematical

    I guess by the ‘statistics’ argument one could exonerate OJ based on the fact that he slashed fewer throats than Ted Bundy.

  • current student

    umm, it’s not that difficult. if you type in Yale University in “Party Last Name” you get 217 hits. almost all of which are Yale University and not the hospital

  • Geeezzz

    No Lies and Statistics – Its pretty clear for anyone…..

    If you go to the site and type Yale (ignoring the hospital) you get 15 hits. Wesleyan is 11 with 3 going on right now…..

    Did you take stats?

  • Luke R Hornblower ’05

    I got the offer for the SEC Summer Honors Law Program in DC. I’m not sure what division I’ll be in yet. I’m angling for the division of investment management, since that is where my experience is. I go to Southwestern Law School in Los Angeles.