Liu Backtracks on Placement Agents
June 22nd, 2010

In February, Comptroller John Liu said he was going to lift the ban on placement agents — middle men (or women) who help orchestrate deals with investment managers for control over city pension funds.

Today, the comptroller changed his mind.

In light of the evolving regulatory environment in Washington and based on our discussions with the Boards of Trustees, we found it appropriate to keep in place the ban on placement agents for private equity, said Liu in a prepared statement.

Though this doesn’t mean the comptroller won’t revisit the issue.

Placement agents were the subject of a couple of nasty scandals across the country — including right here in the Empire State. A ban on the state level has been championed by State Comptroller Tom DiNapoli.

When Liu announced in February he wanted to ease the ban, the New York Times called it a “worrying step backward.”

Today’s reversal was accompanied by a series of new disclosure requirements for those that do business with the city’s pension system — the Teachers Retirement System (TRS) and the New York City Employees Retirement System (NYCERS) — valued at $74.5 billion. As part of the announcement, Liu reiterated his commitment to reject campaign contributions from investment managers or their agents seeking to do business or already doing business with the city’s pension funds.

The other requirements, straight from Liu’s press release, are below.

Investment managers must certify in writing that they have not given any gifts to any employee in the Comptrollers Office, and have complied with NYC Conflict of Interest Board gift restrictions for the Systems and Trustees ;
Investment managers must disclose all contacts with employees of the Comptrollers Office regarding new investments as well as contacts with other individuals, such as Trustees, involved in the investment decision-making process;
Investment managers must certify / agree to the following:
o No placement agent was used in the connection with securing the Systems commitment to any private equity investment transaction;
o Full disclosure of all fees and terms relating to any firm retained to provide marketing or placement services for transactions that are not covered by the placement agent ban;
o Marketing/placement fees, if any, shall be fully borne by the investment manager;
o They have read and complied with Chapter 68 of the NYC Conflict of Interest Board rules and have not caused any employee of the Comptrollers Office or Trustee or employee of NYCERS or TRS to breach them in any way;
o Agree that Systems may terminate an investment commitment or contract, and any obligations to pay future management or performance fees, for violation of the Systems placement agent policy and related disclosure requirements.

By on June 22, 2010, 3:52 pm
In category: Albany,Crime & Safety,Economy,Electoral Politics,Gotham City,Governing,Law,nextNY,Public Finance | 1 Comment »

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One Response to “Liu Backtracks on Placement Agents”

  1. Andrea Simmons Says:
    April 11th, 2013 at 10:54 pm

    I definitely recommend this free job placement website, it helped me with contacting employers, dressing up my resume and setting up interviews.

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