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NJ Attorney General Matter

In 2009, after a two-year investigation by the New Jersey Attorney General, Stevens and the attorney general filed competing lawsuits against one another. The New Jersey Attorney General suit against Stevens, its then-president and chairman of the Board of Trustees alleged numerous claims involving breach of fiduciary duty and other causes of action primarily relating to financial practices and the financial management of the Institute and the compensation and certain loan transactions involving the then-president. The Stevens suit against the attorney general contended that the state attorney general had overstepped her legal authority over a private institution, and sought that any case be pursued by confidential arbitration.

On January 15, 2010, Stevens announced that the institute and the New Jersey Attorney General's office agreed to a settlement of the September, 2009 lawsuit filed by the NJ Attorney General, as well as the separate suit filed by Stevens against the Attorney General. In the settlement, the parties agreed to a number of changes to Stevens' governance procedures, and it appointed a Special Counsel to oversee the implementation of these changes and prepare periodic reports on Stevens’ progress. Additionally, in a letter to the institute on January 15, 2010, the chairman of the Board of Trustees, Lawrence T. Babbio Jr., and the then-president Harold J. Raveché announced that Raveché had voluntarily decided that he would not continue as president beyond June 30, 2010 after 22 years of service as the institute's sixth president. The settlement made Dr. Raveché a consultant to the Institute through October 2011 and forced him to repay the outstanding balance of loans previously made to him by Stevens. It concludes with no admission of liability or unlawful conduct by any party.

The Special Counsel, as appointed in the settlement, prepared six reports on the progress on the governance changes outlined in the settlement agreement. The sixth and final quarterly report, dated August 3, 2011, states that Stevens completed on schedule the agreed upon changes to its governance procedures and that “Special Counsel now finds Stevens to be in full compliance with the terms of the Consent Judgment.” While the specific compliance requirements have been fulfilled, the Special Counsel will continue to monitor certain activities of Stevens through February of 2012.