Articles Tagged with pay-to-play

Federal Prosecutors in Manhattan have filed criminal charges against Navnoor Kang, a former investment manager at the New York State Common Retirement Fund, and broker Deborah Kelley. The two of them are accused of directing over $2B in business to two broker-dealers in return for bribes, including money, expensive jewelry, cocaine, Paul McCartney concert tickets, prostitutes, and other lavish expenses. This is the latest “pay-to-play” scam involving the state’s pension fund, which is the third largest in the US.

Kang, who previously served as managing director at Sterne Agee Group Inc., allegedly accepted over $100K in bribes for purportedly leveraging his role as director of fixed income for the pension fund to send up to $2.5B in state business to Kelley and another broker, Gregg Schonhorn of FTN Financial Securities Corp. As a result of Kang sending this business their way, Kelley and Schonhorn made millions of dollars in commissions.

Schonhorn has already pleaded guilty to his involvement in the pay-to-play scam. According to prosecutors, in 2014, Schonhorn’s firm did $1.5M in business with the NY pension fund. By 2016, that figure was at over $2.3B. Kelly’s broker-dealer, meantime, went from having no business with the New York pension fund in 2014 to $179M in business this year.

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