New York City Comptroller William C. Thompson, Jr. announced today that the trustees of the Police Pension Fund have unanimously agreed to immediately suspend the use of placement agents, firms and middlemen in investments with the New York City Pension Funds.

Police is the second New York City Pension Fund to heed Thompson’s call that they suspend the use of such agents and firms. Last week, the New York City Employees’ Retirement System (NYCERS) – the largest of the City Pension Funds – approved the suspension.

Two weeks ago, Thompson asked the New York State Attorney General to look into whether the city retirement systems were “intentionally misled or deceived” as to the identities of any placement agents involved in an investment by the city systems in the Quadrangle Group. Thompson’s request was prompted by media reports indicating that Hank Morris and Searle & Company had received a placement fee.

The City Pension Funds invested $125 million in Quadrangle in 2005 and 2006, but at no time did the Pension Funds’ consultant ever identify Hank Morris or Searle & Company as a placement agent in that transaction. In fact, in a due diligence questionnaire issued by the Pension Funds’ consultant, Quadrangle identified Monument Group and Helix Associates Limited as the only placement agents.

The New York State Comptroller announced a ban on placement agents last month, and other large public pension funds across the nation are considering similar actions. Thompson plans to ask the remaining City Pension Funds to approve a similar suspension in the coming weeks.

Trustees of the Pension Funds include Mayor Bloomberg, his commissioners, and representatives and appointees from labor unions. In addition to Police and NYCERS, the other funds are the Teachers’ Retirement System of New York, New York City Fire Department Pension Fund, and Board of Education Retirement System.

The Comptroller serves as a member of the Board of Trustees of four of the five Funds and is investment advisor to, and custodian of, the five. The Funds cover more than 237,000 retirees and beneficiaries and more than 344,000 City and City-affiliated employees. The Funds have combined assets of more than $82.5 billion as of December 31. Police held more than $16.3 billion as of that date.

The Police Pension Fund trustees are: Mayor Michael Bloomberg; New York City Acting Finance Commissioner Michael Hyman; New York City Police Commissioner Raymond Kelly (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Thomas Sullivan, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.

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