An investigation by the New York State Comptrollers office has shed more light on Navnoor Kang, the former head of portfolio strategy at the New York State Common Retirement Fund who allegedly manipulated internal processes to conceal a pay-to-play scheme.
Kang, who in December was indicted for accepting bribes in exchange for the pension plans fixed-income trading business, allegedly deleted records documenting the identity of the brokers used in transactions he oversaw, to hide any wrongdoing, according to a review released Wednesday by the comptrollers office. In January, Kang, the pension funds former director of fixed income, reportedly denied in federal court that he accepted any bribes.
Unlike his predecessor, Kang personally made trades without anyones approval, according to the review. The investigation also found that Kang would tell brokers involved in his scheme to send trade confirmations to a subordinate investment officer, who hed then instruct to approve the trades.
Comptroller Thomas DiNapoli wrote in the review that Kang used the trading process not only to steer business to his accomplices, but also to create the false impression that most of these transactions were conducted by investment staff and then approved by him.
The review also described several issues during Kangs tenure at the pension fund, including a ski trip he had taken on the dime of a broker, and problems with his management, including a lack of communication, that led to his firing in February 2016.
DiNapoli outlined several actions that the pension plan will take in response to Kangs manipulation of internal controls. The New York State Common Retirement Fund will reinstitute weekly and monthly trade reports that include broker names reviewed by the funds CIO or deputy CIO. The deputy CIO and director of compliance will also regularly review trading reports for spikes or anomalies in trade volume.