Attorney General Andrew M. Cuomo issued more than 100 new subpoenas to investment firms and intermediaries who brokered deals with public pension funds, according to The New York Times.
Cuomo told the NYT that in a preliminary review by his office found that as many as half of the intermediaries in pension fund transactions in New York State and New York City were not properly licensed and registered with a broker-dealer, as required by federal securities laws. Failing to register could violate the Martin Act.
“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.
Cuomo conferred with the offices of 35 other attorneys general and raised questions about public investment practices in other states, in particular New Mexico and California.
Wetherly Capital Group is among the firms being scrutinized by Cuomo. Wetherly is a Los Angeles-based placement agent firm run by Dan Weinstein, a prominent Democratic fund-raised. Wetherly is being examined for his payment to a firm affiliated with Hank Morris, a top aid to Alan G. Hevesi, the former New York State comptroller as part of an investment deal it brokered for CalPERS.
Gold Bridge Capital is also under investigation because the firm acted as a placement agent on at least one deal involving the New York State pension fund.