A placement agent for The California Public Employees’ Retirement System (Calpers) was indicted Monday for conspiracy to create and transmit fraudulent documents and committing mail fraud and wire fraud.
This long expensive Federal investigation possibly could have been avoided if the U.S. Securities and Exchange Commission (SEC) had not bowed under to Wall Street pressure and dropped its proposed national ban on placement agents in 2009.
The Wall Street lobby is so strong that placement agents still run rampant, cutting backroom deals in state capitols and city halls all over the country. While placement agents claim to widen options to plans, in reality these middlemen serve no useful purpose as most public plans have independent consultants.
In California, a state placement agent ban was proposed but opposition led by Private-equity firm Blackstone and their captive placement agent Park Hill were able to water down the bill to mere registration spending millions on lobbying. In Kentucky a ban was proposed in 2011 but like California, came back as watered down registration in 2012.
You’ll probably want to read the rest of this Wall Street Journal article from Chris Tobe.
And then ask yourself why Frankfort is sitting on its hands.
This is why Kentucky can’t have nice things.