SEC Pension Probe Extended to L.A. Fund

April 24, 2009 ( - The U.S. Securities and Exchange Commission (SEC) has asked the Los Angeles Department of Fire and Pensions for information on instances in which pension board members declared a conflict of interest and stayed out of certain board decisions.

A Bloomberg news report said the SEC wanted to see copies of meeting minutes since 2005 and information on board member recusals, according to assistant general manager Laura Guglielmo. She said the SEC request did not include board action on specific investments.

According to the Bloomberg account, the $14-billion Los Angeles fund has had dealings with at least three firms — Aldus Equity Partners, Odyssey Investment Partners, and Quadrangle Group LLC – that have come up in the SEC’s joint federal-state probe into the role of investment intermediaries at the New York State Common Retirement Fund. 

Quadrangle is Obama Administration auto czar Steven Rattner’s investment firm (See Report: Auto Czar’s Investment Firm Focus of Pay-to-Play Probe ).

In the New York investigation, the SEC and the state Attorney General are looking into the role of private placement agents in helping money managers win pension business. New York state Comptroller Thomas DiNapoli has announced a ban on using placement agents (see DiNapoli Bars Placement Agents for Empire State Fund ) and the SEC was reported to be considering its own regulation of the practice (see SEC Ponders Pension Intermediaries Ban ).

Quadrangle has also come up in a similar pension probe going on in New Mexico (see Auto Czar Also Indicated in NM Pay-to-Play ).