New York State Comptroller Thomas DiNapoli has forbidden the use of placement agents, paid intermediaries and registered lobbyists in investments with the New York State Common Retirement Fund, including flat fees and contingent fees.
The ban is a response to charges, including fraud, bribery and money laundering, brought in March and April, involving illegal fees paid in return for commitments from NYSCRF to private equity firms. See related story on pp. 4.
In an April 22 statement announcing the ban, DiNapoli also said Day Pitney LLP, a law firm specializing in pension fund issues, and Pension Consulting Alliance, an investment consulting firm, are reviewing NYSCRF investments with the firms under investigation by the New York State Attorney General Andrew Cuomo and the Securities and Exchange Commission.
“The Hevesi administration violated the public trust,” DiNapoli said. “Since I took office, we’ve worked to implement reforms that will help restore integrity and trust in this office. Banning placement agents and lobbyists from involvement in investments is the next step, and it’s a big step.”
DiNapoli is drafting legislation to codify the pension fund reforms he has made since taking office in 2007. He is has also asked Eric Dinallo, the superintendent of the New York State Insurance Department to codify the ban into NYSCRF regulations, the statement said.