Friday, 25 July 2014
Last updated 18 hours ago
Jul 27 2009 | 9:59am ET
In the wake of the pay-to-play scandal in New York, the Securities and Exchange Commission moved to change the way hedge funds, private equity firms and other investment companies drum up business from pension funds and other public investment vehicles.
The agency last week unanimously approved a rule barring investment firms whose executives donate to the campaigns of elected officials involved in awarding mandates from managing those mandates. Last week’s vote opens a 60-day comment period.
“Pay-to-play practices can result in public plans and their beneficiaries receiving sub-par advisory services at an inflated price,” Mary Schapiro, the regulator’s chairman, said. “There should be no place for such practices in an investment-advisory industry comprised of fiduciaries that are subject to high standards of ethical conduct.”
The donation ban would cover firms and some of their “executives and employees.”
An investigation by New York Attorney General Andrew Cuomo has revealed that some placement agents paid kickbacks to a pair of aides to the state’s former comptroller in exchange for getting business for their clients from the $122 billion New York State Common Retirement Fund. Two men have already pleaded guilty to charges stemming from the probe, including an employee of hedge fund HFV Asset Management. The Carlyle Group, Pequot Capital Management and Quadrangle Group have all been caught up in the scandal.
Cuomo has reached deals with several firms involved in the scandal, including Carlyle, with each agreeing to stop using placement agents.
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…