The New York Times reports that on Wednesday, the SEC issued a cease-and-desist order regarding a brokerage firm that Callan sold to the Bank of New York (BoNY) in 1998. The sales agreement called for BoNY to pay Callan over eight years, increasing the payment each year if Callan sent enough of its clients’ brokerage business to the bank to meet certain benchmarks.

The SEC said pension officials occasionally asked Callan whether it was being rewarded for sending them to BoNY, and Callan said no, according to the New York Times. The SEC said these responses were “inaccurate and misleading.”

In 2005, Callan changed its disclosure form to provide the required information about the payments. By that time the SEC had replaced its paper record-keeping system with an online system to give the public access to the disclosures of registered investment advisers, but the part of the disclosure form dealing with conflicts-of-interest has not yet been put into the online system, and the paper records are no longer accessible.

A Callan spokeswoman said the firm’s eight-year agreement with the BoNY had expired on January 1 and the payments at issue had ended.

Callan neither admitted nor denied the finding, and was not fined by the SEC.

This is not the first time Callan has been accused of having pay-to-play arrangements or failing to disclose them. Last August the city of San Diego sued Callan, which helped invest the city pension fund for 23 years, saying it had undisclosed conflicts from a pay-to-play scheme.

As a result of its probe into the operations of 24 pension consultants who are also registered investment advisers (RIAs), the SEC recommended sweeping changes in the consultants’ policies and procedures to make sure they are fulfilling their fiduciary obligations to advisory clients – including the proper disclosure of potential conflicts-of- interest.