The New York City comptroller has moved to ban placement agents from involvement in investments with city pension funds. Trustees for the five city pension funds will meet and determine whether to approve the ban in the near future.
The city comptroller, William Thompson, has also asked New York’s attorney general Andrew Cuomo to take up an investigation of whether the Quadrangle Group “intentionally misled or deceived” the pensions as to the identity of any placement agents involved in investments by the funds in Quadrangle.
The five city pensions, with combined assets of $82.5 billion, invested $125 million in Quadrangle in 2005 and 2006. At the time, Quadrangle disclosed it used Monument Group and Helix Associates as the only placement agents.
A Wall Street Journal report revealed that Quadrangle paid Searle for the 2005 investment, citing an attorney for Searle.
“We take any ethical lapses by our managers seriously and will consider any remedies available to investors, and would certainly view any confirmed instances of wrongdoing as a disabling factor in any consideration of future investments,” Thompson said.
Thompson’s call for a ban on the use of placement agents comes the same day that the $122 billion New York State Common Retirement Fund imposed a ban on placement agents, paid intermediaries and registered lobbyists from participating in investments with the pension.