U.S. DoJ Pay-to-Play NYS Pension

On 29 September, SDNY charged dealer with NY public pension fund bribery.


  • Deborah Kelley, was ex-MD of institutional fixed income sales at a broker dealer.


  • Kelley participated in scheme involving the NY State Common Retirement Fund.
  • Bribed official with control over investment of $50bn State pension fund assets.
  • Directing business to her firm, and making thousands of dollars in commissions.


  • Pension fund administered for the benefit of public employees of the State of NY.
  • 2014-16, Navnoor Kang was responsible for fixed income investment at NYSCRF.
  • Kang, Kelley, others participated in a scheme, to defraud NYSCRF and members.
  • Bribes to Kang included entertainment, travel, and lavish meals, and other items.
  • In exchange Kang used position to promote interests of Kelley and her brokerage.
  • NYSCRF domestic bond transactions with B/D went from zero to $156mn in year.
  • Kang’s trades resulted in $0.5mn commissions, Kelley herself earned over $200k.

Obstruction of Justice

  • 2015, SEC opened investigation into entertainment and benefits provided to Kang.
  • Kelley and Kang were subpoenaed, agreed to align stories and give false testimony.
  • Defendants each falsely testified under oath, on expenses Kelley had paid to Kang.


  • Kelley fined $50k, to forfeit $187k, and complete 1000 hours of community service.
  • Sentenced in Manhattan federal court to three years’ probation, including 6 months
    of home confinement, for participating in the bribery scheme involving the NYSCRF.
  • Kang charge re conspiracy, securities fraud, honest services wire fraud, obstruction
    of justice are currently pending, presumed innocent unless and until proven guilty.
  • Kang trial scheduled December 4, 2017, restitution decided within 90 days of sentencing.
  • December 2016, Gregg Schonhorn, VP at another NY B/D, pled guilty for also taking part