(October 22, 2009) – The former head of the Securities and Exchange Commission (SEC), following recent troubles involving placement agents and other middlemen at multiple public pensions, is calling on President Barack Obama to create a panel to investigate the nation’s public funds.
According to Bloomberg, Arthur Levitt—who headed the SEC from 1993 until 2001—is calling for a full-scale investigation into payments made to placement agents. “It’s a national disgrace,” Levitt stated on Bloomberg Television. “It’s in pension funds all around America, and people are being badly hurt by this.”
Levitt’s call comes after multiple scandals involving state pension plans. The New York State Common Fund—considered the epicenter of the placement agent scandal, and the subject of a recent article in ai5000—already has banned the use of placement agents, and the SEC is looking to follow suit. New Mexico pensions also have been caught up in the issue.
The California Public Employees’ Retirement System (CalPERS) also has had recent troubles, with a former board member—Al Villalobos of Arvco Financial Ventures, who served from 1993 to 1995—reportedly accepting payments from money managers in return for arranging investments with America’s largest public pension fund.
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