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SEC Completes Placement Agent Investigation Without Further Action

Tuesday, 07 16, 2013

Kentucky Retirement Systems
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The SEC enforcement staff, in a July 11, 2013 letter to KRS’ outside counsel, Ryan S. Stippich of Reinhart Boerner Van Deuren s.c., stated that "This investigation has been completed as to all of your clients, including the Kentucky Retirement Systems and certain former and current trustees and employees of KRS, against whom we do not intend to recommend any enforcement action by the Commission."

KRS Executive Director William A. Thielen stated that "KRS is pleased that the SEC has completed its investigation and will not be taking further action. KRS takes any assertion of wrongdoing seriously and KRS fully cooperated with the SEC investigation. We believe that the SEC, with its broad investigatory and subpoena powers, was in the best position to ferret out any securities laws violations related to placement agent involvement in the investments made by KRS and it was very welcome news that the SEC’s investigation resulted in a determination that no violations of the securities laws should be pursued."

KRS was proactive with respect to the involvement of placement agents hired by outside investment managers. In August 2009, it was one of the early adopters of a placement agent disclosure policy. Then it conducted an internal audit of the use of placement agents in 2010, and obtained a second audit by the Commonwealth Auditor of Public Accounts which was completed in 2011. KRS has always taken seriously its obligation to make sure that decisions at KRS with respect to investments are made based on the merit of those investments rather than any other circumstances.