NEW YORK - Raymond Harding, a former chairman of the New York Liberal Party, has been charged in connection with a multimillion-dollar kickback fraud involving the New York State Common Retirement Fund. Valued at $122 billion, it is the city's biggest pension fund. Harding denies the charges, brought by New York attorney-general Andrew Cuomo, of participating in a scheme to skew the process of selecting investment managers for the pension fund to favour political allies, friends and family. The case is the result of a two-year investigation into the management of the pension fund.
Cuomo accuses Harding of extracting more than $800,000 in bribes through sham placement fees arranged by Henry Morris and David Loglisci. Cuomo has also accused Morris and Loglisci, both of whom have pleaded not guilty, of conspiring to sell access to the fund in exchange for kickbacks and other payments, including $13 million in bribes from five investment deals involving the Carlyle Group, which says it is co-operating with the investigation.
The New York State Common Retirement Fund has only one trustee - the New York comptroller - and both Morris and Loglisti served under former state comptroller Alan Hevesi. Hevesi resigned in 2006 after pleading guilty to an unrelated felony. Cuomo's investigation has focused on decisions made during Hevesi's period in office.
Harding was allegedly paid the $800,000 for investment deals with money managers Paladin and Pequot. The two firms have not been accused of any wrongdoing. Former hedge fund manager Barrett Wissman, associated with Texas-based Hunt Financial Ventures, has already pleaded guilty to the corruption scheme. Wissman was accused of arranging some of the payments made to Morris and receiving around $12 million in fees. He has agreed to pay $12 million in penalties to the New York state and to make a partial settlement of the Securities and Exchange Commission's charges without admitting or denying the allegations. Cuomo is now using Wissman as a witness to the Harding case, and says he expects to bring further charges.
More on Regulation
SSM chair also wants to end rule opt-outs that make banks "look stronger than they really are"
Dodd-Frank and Mifid II won't stop market disorder but will penalise hedgers
Floors framework should not overstate risk, says Sweden's bank supervision chief
RBS risk veteran says banking activities pose greater threat
Sign up for Risk.net email alerts
Oxford professor David Vines argues that the carrot is as important as the stick
Sponsored webinar: IBM
Watch highlights of this year's London conference
Operational risk and the challenges of defining and dealing with conduct risk
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.