PCG Pays $2 Million To Escape New York Probe
Pacific Corporate Group, a La Jolla, Calif.-based private equity consultant, has agreed to pay $2 million as part of a settlement related to the New York state pension kickback scandal. PCG also has agreed not to use placement agents to solicit business from public pension funds, although it can continue to use placement agents when securing fund commitments for public pension clients (except when banned by a client, like the New York State Common Retirement Fund). In exchange, NY Attorney General Andrew Cuomo said that he has ended the investigation into PCG, although did not specify if the termination was to all of PCG's activities or only to its New York dealings (PCG has major business with state and municipal pension systems in California, and word is that Cuomo was taking a look via The Martin Act). In a statement, PCG said: "We are taking these steps to make the public whole for the improper actions of a former executive, to put this episode behind us and to move our business forward." That former executive is Steve Moseley, who in late 2006 helped form a $750 million co-investment vehicle funded by the New York State Common Retirement Fund. It was done in partnership with hedge fund The Clinton Group (where Moseley later went to work), and allegedly included an undisclosed participation by indicted "placement agent" Hank Morris. The vehicle also included a partial ownership, and investment committee seat, for Barrett Wissman, a Texas hedge fund manager who has plead guilty to securities fraud.
