Deals & People May 21, 2015

NY Life Names Investment Management Head

Yie-Hsin Hung has been named chief executive of New York Life Investment Management after serving as co-president of the division.
Reported by

Hung, who has nearly 30 years of experience, joined New York Life in 2010 to run the institutional investments business and was promoted in 2014 to co-president of the investment management group.  Previously, she was at Bridgewater Associates. She held numerous positions at Morgan Stanley Investment Management, including managing director, global head of strategic acquisitions and alliances, chief administrative officer and head of the firm’s private equity and absolute return businesses. Her time with Morgan Stanley began in the investment banking division, with a primary focus on real estate.

Hung reports to Chris Blunt, president of the Investments Group, which includes all of New York Life’s asset management businesses. The firm reports it has more than $500 billion in assets under management.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Hung holds a bachelor’s of science from Northwestern University and a master’s in business administration from Harvard Business School.

Hung takes over from Drew Lawton, who is now a special adviser to Blunt and will retire at the end of the year. Stephen Fisher, formerly co-president of New York Life Investment Management, is now president of NYLIM and reports to Hung. He continues as president of the MainStay Funds.

Compliance May 21, 2015

Advisers Charged with Defrauding Atlanta Pension Funds

The SEC announced fraud charges against an Atlanta-based investment advisory firm and two executives accused of selling unsuitable investments to police, firefighter and transit worker pension funds.
Reported by

The Securities and Exchange Commission’s (SEC) Enforcement Division alleges that Gray Financial Group, its founder and president Laurence O. Gray, and its co-CEO Robert C. Hubbard IV breached their fiduciary duty by steering several Atlanta public pension fund clients to invest in an alternative investment fund offered by the firm, despite knowing the investments did not comply with state law. 

Georgia law allows most public pension funds in the state to purchase alternative investment funds, but the investments are subject to certain restrictions that Gray Financial Group’s fund allegedly failed to meet.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

In an order instituting an administrative proceeding, the SEC’s Enforcement Division alleges that Gray Financial Group has collected more than $1.7 million in fees from the pension fund clients as a result of the improper investments.

According to the order, Gray Financial Group recommended investments in its fund called GrayCo Alternative Partners II LP to the city of Atlanta’s Firefighters’ Pension Fund, General Employees’ Pension Fund, and Police Officers’ Pension Fund, as well as the MARTA/ATU Local 732 Employees Retirement Plan.

The SEC alleges the investments violated Georgia law in the following ways:

  • A Georgia public pension fund’s investment is limited to no more than 20% of the capital in an alternative fund. Two of the pension funds’ investments surpassed that limit.
  • The law requires at least four other investors in an alternative fund at the time of a Georgia public pension fund’s investment. There were fewer than four other investors in GrayCo Alternative Partners II LP at the time of these investments.
  • There must be at least $100 million in assets in an alternative fund at the time a Georgia public pension fund invests. GrayCo Alternative Partners II LP has never reached that amount.

The SEC’s Enforcement Division further alleges that Gray Financial Group and Gray made material misrepresentations to at least one client when asked specifically about the investments’ compliance with the law. They also misrepresented the number and identity of prior investors in the fund.

The matter will be scheduled for a public hearing before an administrative law judge for proceedings to adjudicate the Enforcement Division’s allegations and determine what, if any, remedial actions are appropriate.

«