HFV Management and Odyssey Investment Partners settled with New York State Attorney General Andrew M. Cuomo as part of his continuing investigation of efforts to influence investment business with the $132.8 billion New York State Common Retirement Fund, Albany.
Odyssey will pay $400,000 to the state, while “HFV co-founder Barrett Wissman has already agreed to pay $12 million to the State of New York as a part of his guilty plea (in connection with Mr. Cuomo’s investigation),” according to a news release from Mr. Cuomo’s office on Wednesday. “HFV has previously paid a penalty of $150,000 as part of a settlement with the U.S. Securities and Exchange Commission.”
Mr. Cuomo “finds that HFV’s monetary obligations are satisfied” under this agreement, according to an HFV settlement document.
HFV and Odyssey also have agreed to support the attorney general’s code of conduct, which includes the prohibition of using placement agents to seek investments from public pension funds in New York, the news release said.
Mark Semer, a spokesman for Odyssey, said he had no comment. Alan Futerfas, an attorney for HFV, was traveling and could not be reached for comment by press time.
The HFV settlement “concerns a $100 million commitment” HFV received from the state pension fund, Mr. Cuomo’s news release said. “HFV obtained the investment through a corrupt arrangement between Wissman and Henry “Hank” Morris, then-Comptroller Alan Hevesi’s chief political adviser.”
Messrs. Wissman, Morris and Hevesi are among eight people who pleaded guilty to charges relating to the investigation.
The Odyssey settlement “arises out of Odyssey’s efforts to obtain an investment” from the state pension fund, the news release said. Mr. Morris “falsely told Odyssey” that the fund had its own placement agent, Searle & Co., the news release said. “As a result, Odyssey retained Searle to help obtain an investment in Odyssey Fund III from the (pension fund),” the news release said. “Morris did not inform Odyssey that he was affiliated with Searle and would receive 95% of any fees Odyssey paid to Searle.”
Mr. Morris “then ensured that Odyssey received a $20 million investment in Odyssey Fund III” from the pension fund, the news release said. Odyssey ultimately paid Searle $400,000 in fees relating to the investment, and Mr. Morris received $380,000 of these fees, the news release said.
Twenty-one firms have endorsed Mr. Cuomo’s code of conduct, the news release said.