Wall Street exec fined in state pension fund bribery case

A Wall Street executive was fined $100,000 for his role in a pay-to-play scheme involving the New York state pension fund.

Investment banker John Paulsen fudged an expense account so it wouldn’t look like his brokerage firm had paid for a ski trip for a prized client, Navnoor Kang, former head of fixed income and portfolio strategy at the New York State Common Retirement Fund. Gifts from Wall Street firms to pension fund officials are illegal, though there is a lengthy history of them.

Kang pleaded guilty in 2018 to accepting bribes and served 21 months in prison. Paulsen’s colleague, Deborah Kelley, pleaded guilty to conspiracy and was sentenced to three years’ probation.

Paulsen and Kelley spent $12,692 on a 2015 Park City, Utah, ski trip for Kang and his girlfriend. When getting reimbursed they falsely told their firm, Sterne Agee & Leach, that other clients had attended. The trip had its intended effect: Sterne Agee billed the station pension fund about $6,000 in weekly gross commissions before the ski trip, but in the months afterward the figure jumped to $17,000 per week.

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