NYC's Thompson Backs SEC Private Placement Agent Regulations

In a letter to SEC Chair Mary Schapiro, Thompson said such a regulation is needed to “to increase transparency and public confidence in the investment activities of all public pension funds.”

“While I have taken appropriate steps to cause the New York City Pension Funds to suspend the use of placement agents in their transactions, the aforementioned improper conduct underscores the need for broad and comprehensive reform with respect to the activities of placement agents,” Thompson wrote. “Such uniform regulation will hopefully prevent a recurrence of the type of egregious conduct detailed in the complaints and indictment (regarding the New York pension plan), and I am sure that you share my concern that appropriate nationwide oversight and regulation of such agents is long overdue.”

Thompson serves as investment adviser to the city’s pension funds which have a combined asset total of more than $80 billion.

Steps Taken

Both New York (see  DiNapoli Bars Placement Agents for Empire State Fund ) and Connecticut state (see  CT’s Nappier Adds Third-Party Manager Disclosures ) officials have already imposed their private placement agent regulations including the  additional disclosure and registration requirements. Local officials in Los Angeles have also enacted new rules governing the placement agents (see  LACERS Enacts Paid Agent Disclosure Rules )

The moves by the public officials come as a joint state/federal investigation continues into potential wrongdoing by placement agents in connection with the New York state pension program.  Recent media reports indicated the SEC could act on the matter by mid-year (see An SEC Pay-to-Play Rule Expected by Mid-Summer ).

The Thompson letter is available  here .