New York Comptroller Thomas DiNapoli last week sued Aldus Equity Partners LP and its principals for wrongful conduct. DiNapoli is seeking a rescission of the firm’s contract with the New York State Common Retirement Fund, reimbursement of more than $5 million in fees, and punitive damages.
DiNapoli alleges that the boutique investment firm committed acts of fraud, bribery, breach of contract and conspiracy as part of a pay-to-play kickback scheme allegedly orchestrated by Henry Morris and David Loglisci, who were senior staffers of former Comptroller Alan Hevesi.
Morris, Loglisci and others have been charged by state Attorney General Andrew Cuomo and the Securities and Exchange Commission as part of ongoing investigations into the state pension fund. The complaint, filed in state Supreme Court in Albany, named principals Saul M. Meyer, Matthew O’Reilly, and Marcellus Taylor.
The suit “is the next step to unravel the tangled web of misconduct we inherited from the Hevesi administration,” DiNapoli said in a press release. “The one million members of the Common Retirement Fund deserve a full accounting of, and full reparations for, the misdeeds and abuses committed against their pension fund.”
Cuomo praised the action in a statement, saying: “Pension funds across the country are now taking appropriate steps to clean up abuses.”
DiNapoli also has released a list of placement agents that did business with the pension fund while Hevesi was in office. Cuomo has alleged that “sham” placement agents were used as part of the alleged kickback scheme.
Hevesi resigned after pleading guilty in 2006 to an unrelated felony count of misusing state funds and has not been charged in the current investigations.
