Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

NYC Comptroller Will Widen Ban on Pension Placement Agents

Jan. 30 (Bloomberg) -- New York City Comptroller Scott Stringer, who oversees $150 billion in pension assets, called for expanding a ban on agents who solicit investments for the city’s five pension funds.

Stringer, a Democrat who took office Jan. 1, also proposed bolstering financial-disclosure rules for employees who advise the funds. He will appoint a risk and compliance officer and an internal auditor to address potential conflicts of interest and strengthen controls at the comptroller’s Bureau of Asset Management.

“We must have a broader, formal ban to ensure that New York City does not experience the pay-to-play scandals that have plagued other funds in recent years,” Stringer said today in a speech to the Citizens Budget Commission. “These scandals cost taxpayers money and undermine public confidence in, and support for, pensions.”

Stringer is widening a ban on pension placements to cover assets classes other than private equity as New York state’s top financial regulator is probing companies advising city and state pension funds with more than $350 billion in assets. Stringer said his plan wasn’t a response to any abuses in the comptroller’s office.

Approval Needed

Thornburg Investment Management and Sprucegrove Investment Management are the only firms among the city’s almost 250 money managers that employed placement agents, said Eric Sumberg, a spokesman for Stringer. Expanding the ban will require approval by the boards of the funds for police officers, firefighters, teachers, school administrators and civil employees.

Santa Fe, New Mexico-based Thornburg, which began managing international stocks for city pensions in January 2008, employed San Antonio-based Aureus Partners and the New York-based Marwood Group as placement agents, Sumberg said.

Sprucegrove, based in Toronto, employed Fair Haven Partners, based in Santa Barbara, California, as a marketer.

Rebecca Carrier, a spokeswoman for Thornburg, and Mark Wolff, chief financial officer for Sprucegrove, declined to comment.

Stringer appointed his general counsel, Kathryn Diaz, to implement the guidelines. Diaz formerly served as special counsel to Benjamin Lawsky, superintendent of the state Department of Financial Services, who is investigating pension advisers.

In November, Lawsky’s office sent subpoenas to 20 companies that provide consulting services to trustees of the pension funds in New York state and New York City to ensure their advice isn’t influenced by outside financial considerations.

Former New York State Comptroller Alan Hevesi pleaded guilty in 2010 to approving $250 million in pension fund investments in exchange for almost $1 million in gifts. He served more than 18 months in prison.

To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.