Abstract
Since the mid 1970s, many local governments have begun using state‐run local government investment pools for their cash management needs. Some pools operate under statutory limitations on investment instruments known as “legal lists,” other pools operate either under a “Prudent Person Rule” standard, while others use a combination of the two. This article examines the potential dangers of an investment pool relying too heavily upon a legal list fiduciary standard, by examining the West Virginia Consolidated Investment Fund, which lost nearly 25 percent of its principal in a financial scandal during the 1980s.
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