Wednesday, April 15, 2009

Breaking: Fund Manager Pleads Guilty in New York Pension Probe

From Bloomberg:

Barrett Wissman, a Dallas hedge fund manager, pleaded guilty to securities fraud as part of an investigation of corruption at New York’s $122 billion pension fund, state officials said. Wissman, 46, an executive of HFV Asset Management LP, also agreed to a $12 million settlement as part of the probe of illegal kickbacks to arrange pension-fund investments for hedge funds and private-equity firms, according to New York Attorney General Andrew Cuomo. Today, Cuomo announced charges against former New York State Liberal Party Chairman Ray Harding as part of the two-year-old investigation.
Wissman and Hardng are new names in the investigation. The original charges were made against former New York Deputy Comptroller David Loglisci and political adviser Hank Morris.

“Wissman is a witness on this case,” Cuomo said, who added that “There are further charges coming out of this scheme." Wissman, a former board member of the Dallas Symphony Orchestra, will now get a chance to sing.

As for Cuomo, I think he is going after Carlyle. Get your popcorn ready.

According to the original report out of Cuomo's office:

Over twenty investment deals were allegedly tainted by the defendants’ kickback schemes and fraudulent self-dealing, including the following:

...Five investments involving The Carlyle Group, one of the world’s largest private equity funds, totaling approximately $730 million in capital commitments from the State pension fund.
The latest report has almost doubled that number. According to Bloomberg, Carlyle won $1.3 billion of business from the pension fund and it is cooperating with the investigation, which means that Carlyle is trying to figure out who would be a good fall guy--Someone that doesn't know enough about the rest of Carlyle's operations to hurt Carlyle. These things will get very tricky if Carlyle can't get to Cuomo.

Other firms reportedly under scrutiny include Access/NY European Fund, Aldus New York Emerging Fund, GKM/NY Venture Capital Fund, Paladin Homeland Security Fund and Pequot Private Equity Partners Fund.

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