The head of a money management firm pleaded not guilty on Monday to charges accusing him of losing $215 million in state investment funds as part of a wide-reaching scandal involving the Ohio Bureau of Workers' Compensation.

During a brief court appearance, Mark Lay, founder and chief executive of MDL Capital Management in Pittsburgh, said he was ready to enter a plea and waived a reading of the charges against him. US District Court Judge David Dowd Jr. released him on bond and set a trial date of September 4.

MDL managed a hedge fund for speculative, high-risk investments on behalf of the state fund for injured workers that Lay set up in Bermuda.

Lay was indicted last month in Cleveland on charges of investment advisory fraud, mail fraud and conspiracy to commit mail fraud and wire fraud. If convicted, he faces a maximum sentence of 20 years in prison.

The indictment emerged from a wide-reaching case that began with the 2005 revelation that prolific Republican donor Tom Noe was investing state money in rare coins. To date, 19 people have been indicted or convicted in the scandal.

In 2003, MDL also managed $51.5m in the Bermuda Government's Contributory Pension Fund, as well as $18.3m in the Island's Public Service Superannuation Fund.