New York watchdog Andrew Cuomo has nabbed another firm for allegedly bartering investment deals with the state pension funds without a required securities license.
This time, Manatt, Phelps & Phillips, a national law firm, will be forced to pay a $550,000 fine for its previous actions dating back to 2004.
In an announcement today, the state Attorney General stated that Manatt, a firm that has locations in California, New York and Washington, D.C., has agreed to pay the fine, as well as adhere to a five-year ban from any public pension fund in New York. Manatt will also comply with Cuomo’s Public Pension Fund Reform Code of Conduct, which bans the use of placement agents.
From the Attorney General’s investigation, the law firm allegedly “sought to help firms obtain investments from public pension funds without a securities license.”
In 2003, the release notes that Manatt and a California-based lobbyist Platinum Advisors helped to place a $25 million investment by the California Public Employees’ Retirement System (CalPERS) in Levine Leichtman Capital Partners. Both received $187,500 in fees from 2004 through 2006. Both Platinum Advisors and Levine Leichtman Capital have signed up to Cuomo’s code previously.
Additionally, in March 2004, Manatt attempted to secure a meeting with an investment firm with the New York State Teachers’ Retirement System. And in August 2008, the “Albany-based partner/lobbyist at Manatt” also attended multiple meetings with a firm and New York State Comptroller Thomas DiNapoli.
Despite its attempts, no further investments were secured other than the CalPERS commitment, Cuomo’s office said in the Oct. 12 press release.
“Unlicensed agents are untrained, unsupervised and typically traffic in political and personal connections to get access to public money. We have seen all varieties of this risky behavior, and now it includes a prominent national law firm,” Cuomo said in the statement. “We will continue to protect the integrity of public pension funds, which are supported by New York taxpayers.”
In their response, Manatt Phelps & Phillips, said that it “embrace(s) [Cuomo’s] new Reform Code of Conduct” and that it is “pleased to put this matter behind us.”
As of press time, CalPERS said that it was still reviewing Cuomo’s announcement.
Last week, Alan Hevesi, former New York Comptroller, pleaded guilty to accepting nearly $1 million in gifts in exchange for his approval of more than $250 million in pension fund investments.