SIC approves 2 more ‘pay-to-play’ settlements
Total recouped by state is now over $41 million
SANTA FE — The State Investment Council voted Tuesday to approve two new settlements with outside firms in connection with long-running “payto-play” litigation, bumping the total amount recouped by the state to more than $41 million.
The SIC will receive a total of $850,000 under the two settlements — $800,000 in one and $50,000 in the other — and in exchange has agreed to drop any current and future legal claims against the two outside firms.
Both settlements hinge on payments made more than a decade ago to Marc Correra, a politically connected placement agent. One of the firms, HM Capital, was a Dallasbased investment manager that got a $30 million investment deal with the state, and the other, Cabrera Capital Markets, is a broker that worked with Correra.
SIC Deputy Chief Counsel Bruce Brown told members of the 11-member investment council the settlements are part of the state’s recovery strategy.
“We think it’s a good deal relative to what’s at stake and what we could get,” Brown told SIC members during a Tuesday meeting at the state Capitol.
Both settlements were approved in open session — under a revised 2015 transparency settlement — with little dissent.
The $800,000 settlement with HM Capital, which paid Correra a $600,000 finder’s fee after getting the $30 million investment deal with the state in 2007, was approved 10-0.
Meanwhile, the $50,000 settlement
with Cabrera Capital Markets was ratified 9-1, with state Land Commissioner Aubrey Dunn casting the “no” vote.
The SIC filed a lawsuit against more than a dozen individuals in 2011, claiming the state lost hundreds of millions of dollars through pay-to-play and politically motivated investments made during the administration of former Gov. Bill Richardson.
That lawsuit came after a former investment officer for the state’s pension fund for teachers filed a whistleblower lawsuit under seal in 2008 that made similar claims.
The SIC’s suit alleges financial firms paid Correra, the son of former Richardson insider Anthony Correra, and other placement agents millions of dollars in “marketing fees” to help them get state investment business.
In all, Marc Correra shared in more than $22 million in fees from firms seeking investment dollars from the SIC and the state’s pension fund for teachers, the Educational Retirement Board. Correra pleaded no contest to income tax evasion in 2014, but the SIC’s claims against him are still pending.
In all, the State Investment Council has now entered more than a dozen settlements with financial firms and investment consultants as part of its legal effort. The largest of those agreements, a $24 million settlement between the SIC and Chicago-based Vanderbilt Capital, was approved last year by a state district judge after being challenged.