Pennsylvania

Pa subpoenaed by the SEC over “rewards and gifts” for staff.Fighting Teacher Pension Fund | Around the Web-Pennsylvania

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US Securities and Exchange Commission joins FBI Survey of Pennsylvania’s Largest Pension FundSubpoening records of the Board’s adoption of false numbers in financial performance and any improper “rewards and gifts” that may have been provided to staff.

State employees are prohibited from receiving such gifts under a ban Be imposed By Governor Tom Wolf. The sub-poena issued to the PSERS school pension system on Friday was the first sign that investigators were investigating the potential for gifts and money from investment advisors and consultants.

FBI and Federal Prosecutor Launched a $ 70 billion PSERS program criminal investigation in March Immediately after the fund’s board issued a brief statement in December revealing delayed suspicions about the numbers approved for settlement.

Prosecutors’ subpoenas have ordered PSERS top executives to submit information about incorrect calculations to the jury. Buy real estate near Harrisberg headquarters..

While prosecutors and the FBI file criminal cases, the SEC pursues civil cases. It has a wide range of powers to impose fines, discipline financial professionals, and order reforms. No one can be put in prison.

PSERS spokesman Steve Esack said Saturday that the fund did not comment on the SEC’s actions.

The mathematical error in the financial performance of the board was not a minor error.

PSERS — Retirement Program for Public School Employees — oversees the pensions of more than 500,000 active and retired educators. Under state law, many school workers have to pay more for their pension scheme if they fail to meet certain financial goals.

But in December, the 15-member PSERS Board said the benefits were barely sufficient to avoid such increases for teachers.And in April Reversed the course And we adopted a new, lower number. This has increased the payments of more than 100,000 teachers and other school staff employed since 2011. More veteran teachers were given a pass.

From December to the present, the SEC Subpoena is seeking both external and internal documentation and communications regarding the “error or average return recalculation” and “risk / share” processes. Teachers share the risk and have to pay more if the returns are disappointing. They also sought records of board votes, people familiar with the matter said. It was sent to Jackie Lutz, the fund’s chief advisor.

Securities companies reportedly subpoenized Hamilton Lane Advisors, LLC, a sub-Philadelphia company that is considering investing in PSERS’private investment companies for information on transactions with pension funds. Subpoena clearly stated that Hamilton Lane was not the subject of the investigation. Hamilton Lane spokeswoman Katie McGann declined to comment.

Board members were warned about the new subpoena late Friday by William Sullivan, a lawyer at the Pillsbury Winthropsaw Pitman Company in Washington. PSERS Hired his company in April To deal with federal investigations. Sullivan is a former federal prosecutor and helps lead his company’s white-color criminal defense and corporate investigation team.

In addition to Pillsbury, the fund has brought two law firms, Philadelphia-based Morgan Lewis & Bockius and the international company Wombre Bond Dickinson, since the first subpoena hit. .. The pension plan also pays individual lawyers for at least eight employees.

The pension fund says almost nothing about miscalculations, other than admitting the error six months ago. In an internal report obtained by Philadelphia Inquirer, it appeared that key consultant Chicago-based Aon Investment Consulting was responsible. The erroneous result was nothing more than a “business data entry error” by the staff.

The taxpayer-backed PSERS itself rejected the request of the inquirer of the error document submitted under the state’s right to know law. The fund also warned Aon and two other consulting firms, ACA Compliance Group and BuckGlobal LLC, of ​​the request. The press is appealing for denial.

Last year, PSERS paid Aon $ 762,000 and Buck $ 226,000 for computational work, among other tasks. We also paid ACA $ 60,000 to spotcheck the calculations.

PSERS relies heavily on external consultants and money managers as the results of the fund lag behind those of other pension funds.Until this year, the fund allowed outside companies to make luxury reservations Travel arrangements For an investment unit consisting of 60 members of the fund. The money manager will prepaid the costs and PSERS will repay them later.

PSERS says it paid more than $ 700 million in fees and profit sharing last year to over 150 Wall Street companies and other private money managers. Records also show that he spent more than $ 14 million on consultants such as Hamilton Lane, Aon, ACA and Buck Global.

When the December pension system adopted a fake number for its performance, it was adopted despite the opposition of three board members. The three who abandoned the approval of the numbers were former Democratic Party Secretary of State Joseph Torsera. State Parliamentarian Frankrian (R., Lebanon); Richard Vague, a state banking secretary appointed by Democrat Wolf.

At that time, PSERS Chief Investment Officer James H. Grossman Jr. told critics Their concerns were unfounded. “We paid close attention,” he said. “We covered it. Don’t worry.”

Torsera Had previously warned Top PSERS executives said the plan uses new, unaudited data rather than its own previously certified number. PSERS refused to respond when asked if subsequent mathematical reviews confirmed Torsella’s criticism.

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Pa subpoenaed by the SEC over “rewards and gifts” for staff.Fighting Teacher Pension Fund | Around the Web-Pennsylvania

Source link Pa subpoenaed by the SEC over “rewards and gifts” for staff.Fighting Teacher Pension Fund | Around the Web-Pennsylvania

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