MANHATTAN (CN) - The Securities and Exchange Commission charged the former head of New York's Liberal Party on Wednesday of accepting more than $800,000 as a reward for political favors. The government's federal complaint ties Raymond B. Harding to a scheme involving the state's largest pension fund.
The SEC claims that Harding, the former party chairman, and Barrett Wissman, a former hedge fund manager, participated in a "pay to play"-like scheme that extracted kickbacks from investment management firms seeking to manage the assets of the New York State Common Retirement Fund. The SEC previously charged Henry "Hank" Morris and David Loglisci with orchestrating the scheme.
The amended complaint alleges Loglisci repeatedly directed investment managers to "hire" Morris, Wissman or Harding as a finder or placement agent. Once they agreed on a fee, Loglisci would approve the deal. Loglisci ensured that managers that made the requisite payments were rewarded with lucrative investment management contracts, while managers who declined to make such payments were denied fund business, the SEC claims.
Wissman was allegedly awarded more than $12 million in sham "finder" fees and arranged for millions of dollars of additional payments to Morris. Harding received about $800,000 in sham fees that were arranged by Morris and Loglisci, the lawsuit claims.
The SEC additionally charged three entities through which Wissman allegedly perpetrated the fraud - Flandana Holdings Ltd., Tuscany Enterprises LLC, and W Investment Strategies LLC - and two investment management firms with which he was affiliated at the time, HFV Management LP and HFV Asset Management LP.
"These men put their greed above the interests of New York's hard-working public employees," said Robert Khuzami, Director of the SEC's Division of Enforcement. "We will continue to unravel this tangled web of fraud and corruption."
Acting Regional Director James Clarkson is lead prosecutor for the SEC.
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