Former brokers Deborah Kelley and Gregg Z. Schonhorn were recently charged
by the SEC and barred for their alleged roles in a "pay-to-play"
pension fund scandal involving the NY State Common Retirement Fund that
brought millions in trading commissions to the representatives. Navnoor
Kang, a former top official of the nation's third-largest pension
fund, also faces charges.
Former broker Gregg Z. Schonhorn worked for FTN Securities through December
of 2016. When FTN learned that he had pleaded guilty to charges of fraud
in connection with his role in the "pay-to-play" arrangement
involving NYSCRF pension fund, Schonhorn resigned.
Former Broker Deborah Kelley was employed by Seaport Global Securities
until March of 2017 when FINRA barred her from working in the securities
industry. She was charged with and pled guilty to conspiracy to commit
According to the SEC, Navnoor Kang was hired by NYSCRF in 2014 and given
investment responsibility for approximately $50 billion in fund assets.
He allegedly began immediately soliciting and receiving valuable items
from Schonhorn to divert billions of dollars in fixed-income trades to
firms represented by Schonhorn and Kelley. Over the course of his two-year
employment, he received $160,000 or more in expensive trips, dinners,
gifts, cocaine and services of prostitutes to steer a significant portion
of the fund's trading volume to Schonhorn.
By April 2015, Schonhorn had executed approximately $1.5 billion in fixed-income
trades, and by the end of March 2016, that number had grown to about $2.38
billion. The scheme resulted in sizeable payouts to Schonhorn, with him
sometimes wracking in hundreds of thousands of dollars per month in commissions.
Kelley allegedly executed approximately $1 billion in fixed-income trades
on behalf of the fund, also bringing in sizeable commissions as she allegedly
made gifts of about $20,000 in concert tickets, meals, and hotel stays to Kang.
Manhattan U.S. Attorney Preet Bharara reportedly said in a statement that,
"The hard-earned pension savings of New Yorkers should never serve
as a vehicle for corrupt, personal enrichment."
If you suspect that your investments have been affected by fraud, call
the investment fraud attorneys at Meyer Wilson at (888) 390-6491 to discuss
your legal options.