(Adds bylines, dateline, details, paragraphs)
By Joan Gralla and Rachelle Younglai
NEW YORK/WASHINGTON, April 30 New York state's criminal probe of kickbacks paid to invest its $122 billion state pension fund money has exposed a national network of actors whose schemes are ongoing, state Attorney General Andrew Cuomo said on Thursday.
The U.S. Securities and Exchange Commission charged Dallas-based Aldus Equity Partners and one founding principal, Saul Meyer, for their participation. Cuomo, jointly probing New York's pay-to-play scandal with the SEC, charged only Meyer.
This is the third round of charges in the probe, which began with the use of paid middlemen, called placement agents, that investment firms hired to help them win the lucrative business of investing New York state's pension fund.
Meyer paid $300,000 of kickbacks to the former state comptroller's top fund-raiser, Henry Morris, who was indicted in March along with David Loglisci, the former top investment officer, Cuomo said.
Loglisci had the pension fund invest $375 million with Aldus from 2004 to 2006, according to the SEC complaint.
Lawyers for Morris and Loglisci say they are innocent.
Cuomo accuses Morris of turning the state retirement fund into a "piggybank" to raise campaign money, enrich individuals and reward favors. To demonstrate Morris' control of pension investments, Cuomo quoted him as telling an intermediary of Meyer's: "Tell that little peanut of a man that I can take business away as easily as I provided (it)."
Aldus knew that Morris was "working both sides of the deal," Cuomo said, by marketing funds for investments in the Aldus/NY Emerging Fund in which Morris had a 35 percent stake.
New York City pensions should end investments with Aldus, the city comptroller said. The state pension has already done so and is weighing legal remedies against Aldus and Meyer.
Meyer, whose firm also did business in Louisiana, Oklahoma, Texas, New Mexico, California, New York state and New York City, was charged with a felony violation of the state securities law and released on $200,000 bail.
His lawyer Paul Shechtman, of Stillman, Friedman & Shechtman, said: "I learned years ago that it's far easier for a prosecutor to file a complaint than to prevail at a trial. Time and evidence will show that Saul Meyer did nothing wrong." A lawyer for Aldus Equity had no comment.
Cuomo said more charges will be filed but declined comment on who might be next. He said he could rule no one in or out including Steven Rattner, who left the Quadrangle Group -- one of the private equity firms under a microscope -- to lead the U.S. government's auto industry bail-out team.
"This is all across the nation, and it's continuing today," the Democratic attorney general said on a conference call, adding he and other states were "formalizing" their probes.
Cuomo said that so far, he had heard of no reason to probe private pension funds.
The roles played by other professionals, including lawyers and lobbyists, are also being scrutinized, Cuomo said. The probe has led to other big private equity funds, including The Carlyle Group [CYL.UL].
Cuomo said he would announce probe developments involving Illinois and Connecticut as soon as Friday.
German stocks - Factors to watch on March 24
BERLIN/FRANKFURT, March 24 The following are some of the factors that may move German stocks on Friday: