The New York Attorney General's Public Pension Fund Reform Code of Conduct: "New Rules of the Game"

On May 14, 2009, New York Attorney General Andrew M. Cuomo announced an agreement with private equity firm The Carlyle Group (“Carlyle”) in connection with the Attorney General’s investigation into alleged improprieties involving New York State’s Common Retirement Fund, pursuant to which Carlyle agreed to be bound by the Attorney General’s new “Public Pension Plan Reform Code of Conduct” (the “Reform Code”). The principles reflected in the Reform Code, which include an outright ban on the use of placement agents; prohibitions on certain political contributions, gifts and relationships; and extensive new disclosure requirements, are likely to extend beyond the agreement with Carlyle, whether other industry participants voluntarily agree to them or they are incorporated into new federal and/or state legislation or regulations. At a minimum, it appears likely that firms seeking to do business with New York Public Pension Funds will be asked to be bound by the Reform Code. The memorandum outlines key provisions of the Reform Code and suggests action steps for investment firms that may become subject to its requirements or similar requirements.