New York widened its investigation of pension-fund corruption by helping form a multi state task force and issuing subpoenas to probe the role of unregistered and unlicensed agents seeking the investments.
The state is issuing more than 100 subpoenas to investment firms and their agents, officials said Friday. It’s the latest step in a broadening investigation of alleged kickbacks paid in return for pension-fund business.
So-called placement agents with few exceptions must be registered with the Securities and Exchange Commission, state Attorney General Andrew Cuomo said at a news conference. From 40 to 50 percent of the agents that worked with the $122 billion state pension fund are unregistered, he said.
“The troubling pattern of unlicensed agents highlights yet another systemic weakness in New York’s pension fund, creating a situation which is fraught with peril and prone to abuse,” Cuomo said in a statement.
The attorney general on Friday announced that 100 officials in 36 state attorney general offices decided to create “a multistate task force to explore pension fund abuse so states can share vital information to prosecute wrongdoing and facilitate nationwide reform.”
“We are disclosing a national network of actors who often acted in concert,” Cuomo said Thursday in announcing criminal charges against a Dallas money manager. “They collaborated. They often partnered and victimized states and taxpayers all across the country.”
Additional regulation is needed to close “loopholes” in present rules on licensing of agents, the attorney general said Friday.
The subpoenas “will shed light on a process that has been perverted by some unscrupulous individuals and unregulated firms at the expense of hard-working public employees and honest taxpayers,” Cuomo said in the statement.
