US - Law firm Manatt Phelps & Phillips has agreed to a five year ban on appearing before any New York public pension fund and will pay $550,000 to the state, Attorney General Andrew Cuomo said.
The accord follows Manatt's representation of financial firms seeking investments from public pension funds without a securities license and is a result of Cuomo's ongoing investigation into the New York State fund.
The investigation found in March 2004, an Albany-based partner/lobbyist at Manatt arranged a meeting between an investment firm and investment staff at the New York State Teachers Retirement System.
The partner also attempted to arrange a meeting for the same investment firm with the state pension fund, but was unsuccessful. In January 2007, the same person attempted to arrange a meeting at the state pension fund for a different investment firm, but the meeting did not occur.
In 2003 Manatt received $187,500 in fees for successfully placing a $25m investment by the California Public Employees' Retirement System ("CalPERS") in Levine Leichtman Capital Partners Fund III. This was the only time the law firm was successful in its efforts, Cuomo said.
"Unlicensed agents are untrained, unsupervised, and typically traffic in political and personal connections to get access to public money," Cuomo added. "We have seen all varieties of this risky behaviour, and now it includes a prominent national law firm. "We will continue to protect the integrity of public pension funds, which are supported by New York taxpayers."
In addition to the ban, Manatt will also comply with the Attorney General's Public Pension Fund Reform Code of Conduct, which 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 law firm said: "We commend Attorney General Cuomo for investigating the placement process for pension fund investments and we embrace his new Reform Code of Conduct. The firm is pleased to put this matter behind us."
To date, Cuomo's investigation has recovered more than $139m for the state through agreements with sixteen firms and two individuals. The investigation has also resulted in seven guilty pleas.
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