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 desires.”

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