In a matter receiving national press attention, New York State Comptroller Thomas P. DiNapoli has retained Day Pitney to assist the $122 billion New York State Common Retirement Fund ("CRF") in connection with its review of CRF investments with firms under investigation by NY Attorney General Andrew Cuomo and the Securities and Exchange Commission (SEC). CRF has given Day Pitney a broad mandate, including reviewing all investments where improper payments are suspected; conducting due diligence on fund managers; determining CRF's contract rights and effectuating the exercise of those rights with respect to its investments; advising on SEC issues; and developing and implementing negotiation and litigation strategies where appropriate. In short, Day Pitney is performing a top to bottom legal review of the investments and CRF options.

The NY Attorney General has filed a 123-count indictment against Henry (Hank) Morris, the former Comptroller's top political advisor, and David Loglisci, the former Deputy Comptroller, for alleged schemes involving kickbacks paid for access to investments. The charges include enterprise corruption, Martin Act securities fraud, grand larceny, bribery, money laundering, and related offenses. The SEC has also filed a complaint against Morris, Loglisci and several others. Attorney General Coumo recently said, "We are disclosing a national network of actors who often acted in concert . . . They collaborated. They often partnered and victimized states and taxpayers all across the country."

Comptroller DiNapoli took action to remove the general partner of Aldus/NY Emerging Fund, L.P. on April 30. And, Day Pitney filed a complaint in the Supreme Court of the State of New York, Albany County, on behalf of Comptroller DiNapoli, against the removed general partner and certain affiliates. The complaint alleges that Aldus, its principals and its affiliates were knowing and willful participants in a fraudulent scheme to solicit and secure kickbacks in return for awarding fund managers lucrative contracts to manage CRF investments. As a result of the defendants' wrongful conduct, the complaint asserts claims for fraudulent inducement, fraud, aiding and abetting fraud, conspiracy to commit fraud, aiding and abetting breach of fiduciary duty, conspiracy to breach fiduciary duty, bribery and breach of contract, among others. To redress the defendants' conduct, the complaint seeks, among other relief, rescission of the contract with Aldus including restoration of all investment losses incurred by the Aldus Fund, the reimbursement of more than $5 million in management fees paid to the defendants and other compensatory and punitive damages. Comptroller DiNapoli said he will continue to explore his legal rights and options as Trustee with regard to other participants in the alleged pay-to-play scheme and he noted that further legal action against others remains a possibility.