New York Attorney General Andrew Cuomo Thursday recouped nearly $12 million for the Empire State from four firms and one individual connected to illegal investment actions of the state’s pension fund.
New York- and Hong Kong-based
The two investment firms and three unlicensed brokers will also be required to adhere to Cuomo’s Public Pension Reform Code of Conduct, which calls for increased “rigor, integrity, and transparency of the investment process” by eliminating campaign contributions and banning the use of intermediaries, the press release said.
Today’s announcement bolsters Cuomo’s ongoing investigation into questionable actions of former state Comptroller Alan Hevesi’s office and alleged kick-back schemes related to investment contracts. Previously, Cuomo stated that both Quadrangle and GKM paid fees to Henry Morris, Hevesi’s paid political adviser, in order to be awarded additional investment mandates.
Cuomo said that Quadrangle retained Morris “to increase [its investments] from $25 million to $100 million.” In addition to its paid fees for the service, the firm also assisted in a DVD-distribution deal for movie produced for former chief information officer David Loglisci, who previously agreed to a settlement.
Beyond the settlement with Cuomo, Quadrangle agreed to pay the Securities and Exchange Commission $5 million in connection with the its probe of actions in the New York fund. The private-equity firm neither admitted to nor denied the allegations, but said it supports efforts to “ensure that the manager-selection process is based solely on merit.”
Cuomo’s settlement said Global Strategy Group grew the share of the state’s Common Retirement Fund by $1.3 million as a result of its alleged improprieties. In a prepared statement, the firm said it was pleased with the agreement, adding that “we fully support the attorney general.” However, it noted that there was “no finding that we violated any law.”
Cuomo also stated that Platinum Advisors received fees from Ares Management totaling $337,000 for its services in securing contracts for the firm. At the time, it was not licensed to do so, the release said.
In a phone conversation Thursday, Platinum spokesman Dan Newman yesterday said the firm is “pleased that an agreement has been reached.”
And lastly, through Purpose LLC, Cuomo said that both McCabe and Morris allegedly brokered deals for GKM’s “captive fund of funds.” McCabe was paid nearly a half million dollars for his assistance in setting up “$800 million in capital commitments” for the firm, Cuomo said.
As of press time, the New York attorney general’s pension fund reform pool contained 15 firms, 13 of which have agreed to repay more than $100 million to the retirement fund. In total, $130 million has been put back into the $129 billion pension plan.
Contact information for both McCabe and GKM were not available. Both of their signed agreements are available here.
