Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, October 12, 2010

New York AG and Law Firm Settle Charges Involving State Pension Fund Investigation

New York AG Andrew M. Cuomo today announced an agreement with national law firm Manatt Phelps & Phillips, LLP (“Manatt”) in the Attorney General’s ongoing state pension fund investigation. The agreement arises from Manatt’s conduct on behalf of financial firms seeking investments from public pension funds without a securities license.  Manatt has agreed to a five-year ban from appearing before any public pension fund in New York. Manatt will pay $550,000 to the State of New York and will cooperate with the Attorney General’s investigation. Manatt will also comply with the Attorney General’s Public Pension Fund Reform Code of Conduct, which, among other things, bans the use of placement agents to solicit investments from public pension funds and prohibits investments within two years of any campaign contribution from the investment firm to the Comptroller or other elected trustee.

The investigation showed that Manatt made introductions and secured meetings on behalf of firms seeking investments from public pension funds in New York, California, and elsewhere. Neither Manatt, nor any of the Manatt partners who made the introductions, were licensed placement agents or securities brokers under state and federal law. In New York, Manatt made and attempted to make introductions to the New York State Common Retirement Fund (“state pension fund”), the New York City pension funds, and the New York State Teachers Retirement System. The state pension fund is the biggest pool of money in the state and the third largest pension fund in the country, most recently valued at approximately $124.8 billion. Manatt received fees for successfully placing one investment with the California Public Employees’ Retirement System (“CalPERS”). Its other efforts failed.

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