Ex-N.Y. Brokerage Executive Pleads Guilty to Pension Bribe SchemeEx-N.Y. Brokerage Executive Pleads Guilty to Pension Bribe Scheme
Deborah Kelley admitted that she paid bribes to Navnoor Kang, the former director of fixed income and head of portfolio strategy at the New York State Common Retirement Fund.
May 31, 2017
By Brendan Pierson
NEW YORK, May 30 (Reuters) - A former managing director atbroker-dealer Sterne Agee pleaded guilty on Tuesday to bribing aformer portfolio manager at New York state's retirement fund inexchange for tens of millions of dollars' worth of business,federal prosecutors said.
Deborah Kelley, 58, admitted that between 2014 and 2016, shepaid bribes including entertainment, travel and lavish meals toNavnoor Kang, former director of fixed income and head ofportfolio strategy at the New York State Common Retirement Fund,prosecutors said in a statement.
Kang reciprocated by steering state pension business toKelley's firm, prosecutors said - doing about $156 million intrades with the firm in the fiscal year ending March 1, 2015,and about $179 million in the fiscal year ending March 1, 2016.
Kelley received 35 to 40 percent of the hundreds ofthousands of dollars in commissions the firm earned on thosetrades, prosecutors said.
Kang pleaded not guilty to corruption charges in January.
Kelley pleaded guilty to one count of conspiracy to commitsecurities fraud and honest services wire fraud before U.S.District Judge Paul Oetken in Manhattan, according to the officeof Acting U.S. Attorney Joon Kim. Kelley has agreed not toappeal any sentence of five years or less, according to awritten plea agreement.
Kelley's lawyer could not immediately be reached forcomment.
Kelley left Sterne Agee in 2015, not long after StifelFinancial Corp acquired the company, according to FinancialIndustry Regulatory Authority records.
The charges against Kelley and Kang mark the latestpay-to-play case related to the third-largest U.S. pension fund,following a scandal a decade ago that sent the state comptrollerto prison.
The $184.5 billion Common Retirement Fund is the investmentarm of the New York State and Local Employees' Retirement Systemand the New York State and Local Police and Fire RetirementSystem.
According to prosecutors, Kang worked at the fund fromJanuary 2014 to February 2016 and was responsible for investing$53 billion in fixed income assets.
The charges were unveiled last December. Gregg Schonhorn, avice president at FTN Financial Securities Corp who was alsoaccused of bribing Kang, has pleaded guilty and is cooperatingwith the government, prosecutors said at the time.(Reporting by Brendan Pierson in New York; editing by GrantMcCool)
