The information request, which the Wall Street Journal reports was sent out in recent weeks, is part of broader regulatory scrutiny into the intersection of public pension funds and Wall Street. “The SEC is interested in finders’ fees and other payments, and the work done in exchange for those payments,” said spokesman John Nester, according to the WSJ.
He said the agency has sought information from pension fund managers, placement agents and other intermediaries.
As soon as this month, the SEC is expected to propose banning investment advisers from managing state pension funds for a certain period of time if they made campaign contributions to elected officials who oversee the pension program (see NYC’s Thompson Backs SEC Private Placement Agent Regulations ). The nationwide investigation has led several states and pension funds to institute placement agent rules.
The SEC and New York Attorney General Andrew Cuomo have filed securities-fraud charges against several individuals as part of a two-year investigation into alleged abuses of the New York state pension fund alleging the individuals orchestrated a scheme to extract payments from firms seeking investments from the fund.
In May, Cuomo announced that he had subpoenaed more than 100 investment firms and their placement agents in an expansion of the office’s pay-to-play probe. The nationwide probe began in New York and has spread to numerous other states (see Cuomo Announces Multi-state Effort on Pension Abuse).
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