New York City’s pension system has hired chief risk and compliance officers, and an internal auditor as part of a comprehensive ethics reform program following a pay-to-play scandal.
Scott Stringer, the city’s comptroller and overseer of the $163 billion pension system, said the appointments are “important steps in enhancing accountability, transparency, and ethics in [his] office.”
Miles Draycott, formerly at Merrill Lynch and Deutsche Bank, was appointed chief risk officer, and will be tasked with “developing and institutionalizing formal risk management,” the comptroller’s office said.
In addition, Draycott will be responsible for creating and implementing systems to “assess and monitor financial and enterprise risk.”
The pension system hired Shachi Bhatt, the associate director of compliance and risk management at Convergent Wealth Advisors, as chief compliance officer. She will be responsible for implementing systems to “assess and monitor regulatory compliance” within the pension funds as well as external managers, parent companies, and joint venture partners.
Lastly, the comptroller’s office employed Khanim Babaveva, formerly at Grameen America and FINCA International, as an internal auditor.
“One of the lessons of the financial crisis was that risk and compliance functions must have a clear line to the top, which is why these three executives will have direct access to me.” Stringer said.
These appointments are part of Stringer’s six-point ethics reform package announced last year.
The city’s pension system had suffered from “problems with ‘pay-to-play’ practices and conflicts of interest inherent in the use of placement agents,” according to then-Attorney General Steven Cohen in 2010.
Stringer’s office said the reform plan included banning placement agents across all asset classes as of June 2014, boosting investment disclosure policies, and implementing “cutting-edge training on ethics, conflicts of interest, and financial regulation.”