Ch4 Article 2 - N.Y. Takes Aim at Pension Agents -...

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Page 1 of 4 2009 Factiva, Inc. All rights reserved. N.Y. Takes Aim at Pension Agents --- Middlemen Ban Follows Pay-to-Play Probe; Other States May Follow By Craig Karmin, Peter Lattman and Jenny Strasburg 1,031 words 23 April 2009 The Wall Street Journal J C1 English New York state said its public pension fund, one of the nation's largest, would ban the use of middlemen to help private-equity funds and other investors secure its business. The move marked a pivotal development in a burgeoning controversy that has grown from a local corruption probe to a broader examination of the tactics that investment firms used to win lucrative business from vast public pension pools. The intermediaries, called placement agents, are key figures in linking pension funds to investors. The New York inquiry centers on whether government officials and these middlemen engaged in a scheme to extract illegal payments from firms trying to woo state business. "It is unacceptable that a placement agent have any influence in the investments of the state pension fund," New York Gov. David A. Paterson said. The size of New York's fund -- it has $122 billion in assets -- and the state's status as home to the nation's financial industry could lead other states to follow suit. A spokeswoman for the nation's biggest public-pension fund, the California Public Employees' Retirement System, said it was "closely monitoring the New York actions." The head of the board overseeing the New Jersey pension system, Orin Kramer, said that state was watching too, but would defer policy actions on placement agents until the New York investigation is complete. Mr. Kramer said he hoped out of New York
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This note was uploaded on 01/26/2011 for the course MKT 337h taught by Professor Staff during the Spring '08 term at University of Texas at Austin.

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Ch4 Article 2 - N.Y. Takes Aim at Pension Agents -...

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