NEW YORK - Attorney General Andrew Cuomo announced agreements with Israeli venture capital firm Markstone Capital Group LLC (“Markstone”), and California-based placement agent firm Wetherly Capital Group LLC and its broker-dealer DAV/Wetherly Financial (“Wetherly”) to resolve their roles in Cuomo’s investigation into corruption involving the New York State Common Retirement Fund (“CRF”). 

Both firms will adopt Cuomo’s Public Pension Fund Reform Code of Conduct.  Markstone will return $18 million to the CRF and Wetherly will return $1 million associated with CRF investments. Wetherly has also agreed to exit the placement agent business.

“Markstone and Wetherly are the eighth and ninth firms to adopt our Code of Conduct, which ends pay-to-play political contributions and the selling of access to public pension money nationwide,” said Attorney General Cuomo. “New York’s taxpayers deserve rigorous protection against political influence in our public pension funds. I commend these firms for furthering our reform efforts and returning a combined $19 million to the state pension fund through our agreements.”

Attorney General Cuomo’s Code of Conduct bans investment firms from hiring, utilizing, or compensating placement agents, lobbyists, or other third-party intermediaries to communicate or interact with public pension funds to obtain investments. To avoid pay-to-play schemes, the Code prohibits investment firms (and their principals, agents, employees, and family members) from doing business with a public pension fund for two years after the firm makes a campaign contribution to an elected or appointed official who can influence the fund’s investment decisions. This provision also bars all firms currently doing business with the pension fund from making such campaign contributions.

Investment firms must also disclose any conflicts of interest to public pension fund officials or law enforcement authorities, to increase transparency and avoid abuse in the management of public pension funds.