Statement From Attorney General Cuomo Regarding Ongoing Pension Investigation
"We applaud New York City Comptroller William Thompson’s recommendation for reform involving the elimination of middlemen and finders - placement agents. Our investigation has revealed that the system is fraught with peril and prone to abuse. We appreciate the vision and action of Mr. Thompson. In addition, at the City Comptroller's request, we will be investigating whether improper or illegal action was taken by placement agents in connection with investments in the City pension system. Similar reforms were also announced today by New York State Comptroller Thomas DiNapoli. Comptroller DiNapoli's actions are also a positive and important step in moving away from a system that is flawed and has been abused for over a generation.
Importantly, The Carlyle Group has also agreed with our Office to ban the use of placement agents in connection with public pension funds. As one of the nation's largest private equity firms, Carlyle's decision to implement this reform sets an example that we hope others in the industry will follow.
The Attorney General's Office is in the process of establishing a comprehensive code of conduct and reform for public pension systems; one element of the code will be effectively eliminating the use of placement agents and finders. The actions by the City and State Comptrollers and The Carlyle Group are important steps in making such reforms a reality throughout the state and nation.
If two of the largest pension funds in the country and one of the nation’s largest private equity firms can agree to stop using placement agents, it is possible to implement this reform across the board. It is a long overdue reform."