Drexell University is facing an investigation into whether its fiduciers violated federal ethics rules, a group of university employees said on Wednesday.
The Office of the Inspector General is looking into a report by the National Association of Public University Financial Advisors (NAPFA) that found that the University of Pennsylvania’s Board of Trustees did not adequately address the risk of financial harm caused by the financial advisory firm that was advising the university.
The report by NAPFA is the latest to highlight concerns over how Drexels’ two fiduciars have handled the financial services sector.
Last year, the OIG said that the university had a “lack of effective oversight” of the advisers and had failed to adequately supervise their work.
The OIG, which oversees the Office of Investor Protection, has been working with the university’s legal counsel to determine what it can do to strengthen the fiduciarial relationship between its fiducial and investment advisors.
The OIG will also look at the role of the university trustees and board of trustees, according to a university statement.
The University of Pittsburgh, one of the nation’s top public university systems, has also come under fire for the oversight it has of its investment advisors, including the advisory firm it hired to advise the university on debt management.
The NAPFCA is an independent group of people who advise the financial advisors on financial matters.
Its president, Scott Wessels, said in a statement that the fiduciaries are independent and “do not participate in the governance of the institution.”
“The fiduciARY’s responsibility to the university is to make sure that the investment advice given to students is aligned with the investment advisor’s recommendations,” he said.
Drexel, the nations oldest public university system, said it was aware of the OGI’s findings and that the trustees would review the OGE’s report “to ensure that any violations of ethics or fiduciar responsibilities are fully addressed.”
The OGE, which will report to the OIC next week, said that it has received more than 1,300 complaints about Drexelle University’s financial advisers and “has identified potential violations.”
“This includes a number of instances where our fiducials failed to follow the advice of their advisers and engaged in activities that violated their fiduciarium obligations,” the OGA said in the statement.
Dorsdale Securities, the investment firm that advised the university, did not immediately respond to a request for comment.