SEC Joins NY Pension Probe

ALBANY, N.Y. (AP) – The U.S. Securities and Exchange Commission has begun a preliminary inquiry into claims that friends and relatives of former state Comptroller Alan Hevesi received lucrative private fees from investment firms seeking capital from the state pension fund, a lawyer familiar with the matter said Friday.

The New York Times in Friday's editions first reported the SEC's inquiry.

The SEC recently asked to join a probe already begun by state Attorney General Andrew Cuomo, according to the lawyer familiar with the matter who spoke on the condition of anonymity because of the sensitivity of the ongoing investigation.

SEC spokesman Kevin Callaghan said the securities regulator doesn't confirm or deny investigations.

A spokesman for Cuomo also declined comment. Hevesi's private attorney, Bradley D. Simon, didn't immediately respond to a request for comment.

No one has been charged and no crime has been alleged.

Cuomo is investigating Hevesi's dealings in which the former comptroller's longtime political consultant, Hank Morris, reportedly received millions of dollars in private fees from companies seeking investment by the state pension fund. The investigation is also examining private fees paid to associates, friends and relatives of Hevesi.

Cuomo has issued subpoenas to companies and individuals who may have been involved or who knew about the so-called placement fees paid by companies to Morris in exchange for an introduction or access to the comptroller's office under Hevesi.

The comptroller under state law is the sole trustee for investing the public pension for state and local workers now worth $154.4 billion. Although consulting boards of professional investors advise the elected comptroller, the state comptroller has sway over how billions can be invested.

State laws require that investments made by the comptroller, who is also the state's chief auditor, be in the best interest of the fund.

Hevesi, a Democrat, resigned earlier this year after he was convicted of using a state employee as a driver for his ailing wife. Despite the scandal, he was re-elected in November. The Legislature replaced him with Democrat Thomas DiNapoli, a former assemblyman.