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June 02, 2011


DiNapoli Proposes Legislation to Make His Ban on Placement Agents Permanent

State Comptroller Thomas P. DiNapoli has proposed legislation to codify his ban on the involvement of placement agents, paid intermediaries and registered lobbyists in investments with the New York State Common Retirement Fund (CRF). The CRF became the first public pension fund in the nation to ban placement agents when Comptroller DiNapoli issued his Executive Order in April 2009.  His proposed legislation would make the ban part of state law.  If enacted, it would be the first time such a ban on placement agents was codified into law in the United States.

“Since I took office, we’ve worked to implement reforms that will help restore integrity and trust in this office and the pension fund,” DiNapoli said.  “Banning placement agents and lobbyists from involvement in investments was a big step.  Now it’s time to make that ban a permanent part of New York State law.”

“As long as I’m in office, I will never allow placement agents in CRF deals.  But we have to eliminate any potential for abuse in the future.  This bill will make sure that the Fund is protected no matter who is comptroller.”

Immediately after he took office, Comptroller DiNapoli began instituting a series of reforms to address the misdeeds of the previous administration. He has increased transparency, enhanced ethics reporting and worked with the Insurance Department to strengthen oversight of the pension fund.  Among his top priorities has been to restore the public’s confidence in the integrity of the Fund’s investment decision making process and in the operations of the Retirement System.

The legislation, which would add a new Section 425 to the Retirement and Social Security Law, is sponsored by Assemblyman Peter Abbate.  The bill defines a “placement agent or intermediary” as any person or entity, including a registered lobbyist, that is directly or indirectly engaged and compensated by an investment manager to promote investments to or solicit investment by the CRF, whether compensated on a flat fee, a contingent fee, or any other basis.



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