A Reuters news report said Cuomo is investigating millions of dollars of fees investment firms paid to middlemen in return for being hired to invest some of the Empire State’s $110-billion pension fund. Meanwhile, the SEC is conducting a parallel civil probe of the same ties between investment firms and the agents, lobbyists and lawyers they hired.
“This litigation is a non-entity until the criminal matter is concluded in the New York State Supreme Court,” said U.S. District Judge Colleen McMahon of the U.S. District Court for the Southern District of New York, at the hearing, according to Reuters.
Prosecutors fear that defendants in criminal trials will benefit from any materials turned over to them in civil proceedings, Reuters said.
A New York grand jury indicted the former comptroller’s fund-raiser, Henry Morris, and pension investment officer, David Loglisci (see DiNapoli Sues Aldus over Pay-to-Play Scheme and Former NY Common Fund CIO Charged by SEC ).
While grand jury proceedings are sealed, these secrecy rules do not apply to the state securities law, the Martin Act, Reuters said.
The SEC’s case is SEC v Morris et al, 09 cv 2518.
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