The law firm Manatt Phelps & Phillips agreed to a five-year ban from appearing before public pension funds in New York state, including the $124.8 billion New York Common Retirement Fund, as part of a $550,000 settlement with Attorney General Andrew M. Cuomo in the state's ongoing pay-to-play investigation.
“Manatt hereby agrees to a total and complete ban on appearing in any capacity before any public pension fund within the state of New York for a period of five years. … The ban applies to all state, local and municipal funds,” according to a settlement document provided by Mr. Cuomo's office. The law firm will also cooperate in Mr. Cuomo's ongoing investigation of improper influence on state pension fund investments.
The law firm also will comply with Mr. Cuomo's public pension fund code of conduct, “which bans the use of placement agents to solicit investments from public pension funds and prohibits investments within two years of any campaign contribution from the investment firm to the comptroller or other elected trustee,” according to a news release from Mr. Cuomo's office. The state comptroller is the sole trustee of the Albany-based state pension fund.
“The agreement arises from Manatt's conduct on behalf of financial firms seeking investments from public pension funds without a securities license,” according to the release.
Manatt “made introductions and secured meetings on behalf of firms seeking investments from public pension funds in New York, California and elsewhere,” Mr. Cuomo said in the news release. “Neither Manatt, nor any of the Manatt partners who made the introductions, were licensed placement agents or securities brokers under state and federal law.”
The news release said the law firm “made and attempted to make introductions" to the New York Common Retirement Fund, $103 billion New York City pension funds, and the $77.6 billion New York State Teachers Retirement System.
“Manatt received fees for successfully placing one investment with the ($216.4 billion) California Public Employees' Retirement System,” the news release said. ”Its other efforts failed.”
“We commend Attorney General Cuomo for investigating the placement process for pension fund investments and we embrace his new Reform Code of Conduct,” Manatt said in a statement confirmed by spokeswoman Marcia Horowitz. “The firm is pleased to put this matter behind us.”
Mr. Cuomo's investigation into the pension fund's investment business has recovered more than $139 million through agreements in settlements with 16 firms and two individuals, the news release said.
The investigation also has produced seven guilty pleas. Last week, former State Comptroller Alan Hevesi pleaded guilty in New York State Supreme Court to accepting nearly $1 million in gifts in exchange for approving $250 million in investments for the New York State Common Retirement Fund between 2003 and 2006. Mr. Hevesi resigned as comptroller after pleading guilty to a felony in December 2006 for using state employees to chauffeur his disabled wife.