Officials for the Iowa Trust last week announced a $4 million settlement with Bankers Trust Co., which was the custodian for the trust's money.
David Lyons, receiver for the Iowa Trust, said in a news release that the money could be distributed to trust participants as early as next month.
Lyons contended that Bankers Trust in Des Moines was negligent in transferring securities to Steven Wymer, who was head of Institutional Treasury Management, an Irvine, Calif.-based investment firm. Bankers Trust maintains its actions were not negligent.
Under the agreement, Bankers Trust could receive a refund of all or part of the $4 million, depending upon the success of other collection efforts pending in California, Colorado, and Iowa.
The state attorney general's office is seeking to collect $75 million of lost funds allegedly belonging to the Iowa Trust.
The state has filed suits against four California cities, one Colorado bank, and the city of Marshalltown, Iowa, which was a co-founder of the Iowa Trust.
Earlier this month, Iowa Trust officials announced they had retrieved $7.1 million of that sum.
The Iowa Trust was created in January 1990 as a vehicle to allow 88 communities to pool their cash in an investment account handled by Wymer.
In December 1991, the Securities and Exchange Commission charged Wymer's firm with fraud after determining that $75 million was missing from the trust's account.
