May 1 (Bloomberg) -- New York widened its investigation of pension-fund corruption by helping form a multistate task force and issuing subpoenas to probe the role of unregistered and unlicensed agents in arranging for others to manage assets.

The state today is issuing more than 100 subpoenas to investment firms and their agents, officials said. It’s the latest step in a broadening investigation of alleged kickbacks paid in return for pension-fund business.

So-called placement agents with few exceptions ought to be registered with the U.S. Securities and Exchange Commission, state Attorney General Andrew Cuomo said at a news conference. From 40 to 50 percent of the agents that worked with the $122 billion state pension fund are unregistered, he said.

“The troubling pattern of unlicensed agents highlights yet another systemic weakness in New York’s pension fund, creating a situation which is fraught with peril and prone to abuse,” Cuomo said in a statement.

The attorney general today announced that 100 officials in 36 state attorney general offices decided to create “a multistate task force to explore pension fund abuse so states can share vital information to prosecute wrongdoing and facilitate nationwide reform.”

“We are disclosing a national network of actors who often acted in concert,” Cuomo said yesterday in announcing criminal charges against a Dallas money-manager. “They collaborated. They often partnered and victimized states and taxpayers all across the country.”

Licensing Loophols

Additional regulation is needed to close “loopholes” in present rules on licensing of agents, the attorney general told reporters today in a telephone news conference. “Every time we do another fact pattern, we learn another loophole,” he said.

The subpoenas “will shed light on a process that has been perverted by some unscrupulous individuals and unregulated firms at the expense of hard-working public employees and honest taxpayers,” Cuomo said in the statement.

His office found 22 of 45 agents for state pension-fund investments from 2003 to 2006 were unregistered. In New York City, 30 of 70 were unregistered from 2003 to 2009.

The state issued 53 subpoenas to unlicensed agents and 49 to investment firms that paid them, Cuomo’s office said. The purpose is to learn which firms used unlicensed agents and the circumstances, including fees. Officials will also ask whether the payments were disclosed to the pension fund.

Agents Barred

The state on April 22 banned the use of placement agents, lobbyists or other paid intermediaries in pension-fund investments. New York City Comptroller William Thompson recommended eliminating middlemen in city pension investments.

Prosecutors yesterday charged Saul Meyer, 38, a partner at Dallas-based Aldus Equity Partners, with violating the state’s Martin Act by paying for pension business.

Meyer received $175 million in state pension money to manage in return for “an illegal kickback” of $300,000 to Hank Morris, a former adviser to the state comptroller, who manages the pension fund, Cuomo said.

The SEC, which is also investigating pension-fund allegations, made the same accusation in asking that Meyer be added to a civil suit as a defendant.

Meyer did nothing wrong, his lawyer said yesterday. An Aldus Equity attorney said the SEC was careless “with the law and with people’s reputations” because it moved against Meyer without investigating.

The Meyer criminal case is People v. Meyer, 2009NYO35023, New York State Criminal Court, New York County (Manhattan).

To contact the reporter on this story: Karen Freifeld in New York at kfreifeld@bloomberg.net.

Last Updated: May 1, 2009 14:47 EDT