Deal cut in pay-to-play case

NY Attorney General Andrew Cuomo has settled with two L.A. private equity firms in connection with an ongoing corruption probe. Wetherly Capital Group pays $1 million to the NY state Common Retirement Fund, and Markstone Capital, founded by one-time GOP player Elliott Broidy, will return $18 million. Whetherly also agreed to stop being a placement agent. From the LAT:

According to Cuomo's office, Wetherly was paid in excess of $1.3 million in fees for directing New York pension funds to three California private equity firms: Ares Management, Freeman Spogli & Co. and Levine Leichtman Capital Partners.

[CUT]

Broidy, beginning in November of 2002, gave more than $1 million in gifts, political contributions and other benefits "to top decision makers" as well as their friends and family members, with the intent to influence state officials to invest in a Markstone private equity fund, Cuomo's office said. In return, Markstone got a $250-million investment and earned $18 million in management fees.

Broidy has already pleaded guilty to charges he paid $1 million to New York officials to win $250 million in investment capital.


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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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