WASHINGTON (Legal Newsline) –
The Securities and Exchange Commission (SEC) announced fraud charges Dec. 21 against
Navnoor Kang, the director of fixed income for the New York State Common
Retirement Fund from January 2014 to February 2016, over allegations of
orchestrating a pay-to-play scheme.
Kang purportedly pushed $2.5
billion to select firms represented by Gregg Schonhorn and Deborah Kelley that
provided him with luxury gifts and vacations.
“We allege that rather than compete fairly for business from the New
York State Common Retirement Fund’s $50 billion fixed income portfolio, Schonhorn and
Kelley bribed their way in, lining their pockets with millions in commissions
along the way,” said LeeAnn Ghazil Gaunt, chief of the SEC Enforcement Division’s Public Finance Abuse
Unit. “Moreover, they allegedly assisted Kang in covering up
his misdeeds, with Kelley going so far as to help Kang obstruct the SEC’s investigation.”
The SEC seeks a ban against
Kang to bar him from making decisions involving investments in securities at
any public pension funds.
“Kang owed a duty not only to
the New York State Common Retirement Fund but to the more than one million
public servants and beneficiaries that are served by the fund, including police
and fire personnel who count on their pensions to take care of them and their
families,” said Andrew J. Ceresney, director of the SEC Enforcement
Division. “This action demonstrates that the SEC will not tolerate public
officials who abuse public pension funds to satisfy their own greedy and wanton