New York Bans Finders Amidst Kickback Investigation

Apr 23 2009 | 10:52am ET

As the investigation into an alleged kickback scheme at New York State’s pension plan, the Empire State is barring the use of placement agents.

Both the state and the city will no longer use finders to allocate pension fund assets, state Comptroller Thomas DiNapoli and city Comptroller William Thompson said. New York Gov. David Paterson has directed the state’s insurance superintendent to issue an emergency rule making the restriction permanent.

Four men have been indicted in the alleged kickback scheme, including two former top aides to ex-state comptroller Alan Hevesi and the former head of New York’s powerful Liberal Party. A Texas hedge fund manager has also been charged; he pleaded guilty as part of a plea deal. According to the Securities and Exchange Commission, firms paid some $30 million in “finder’s fees” to the men, who then arranged $5 billion in allocations from the $120 billion New York State Common Retirement Fund.

DiNapoli, who succeeded Hevesi after he resigned after an unrelated felony charge, said he has hired a law firm and independent consultant to review all of the pension’s investments with firms that have been identified in the investigation, which include such industry luminaries as The Carlyle Group and Pequot Capital Management. The comptroller is also calling for strict public campaign financing for future comptroller elections.


In Depth

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note