text: SEC's probe of Pa. school pension fund examines staff gifts and trips from Wall Street firms – Investing Signal
  HARRISBURG — The U.S. Securities and Exchange Commission has widened the federal scrutiny of Pennsylvania's mammoth public school pension plan, demanding records that could show whether the fund's staff improperly traded gifts with any of hundreds of Wall Street consultants and investment managers.
  The commission gave PSERS, the state agency that invests $70 billion to fund pensions for half a million working and retired school staff, until Friday, Oct. 8 to produce "all documents and communications concerning any compensation, remuneration, reimbursement, money, gifts, gratuities, trips, or anything of any value" exchanged between PSERS officials and the agency's money managers and consultants.
  The subpoena, first obtained by Bloomberg News, was sent to PSERS Chief Counsel Jackie Lutz last Friday. It did not reveal what firms might be under suspicion. Instead, it asks about the pension fund's dealings with its sprawling roster of 180 exterior money managers, investment houses, hedge funds, private-equity firms, and financial consultants. In fact, the SEC mirrored a public, six-page PSERS list of these outside firms in its subpoena as an attachment.
  Most are investment managers, ranging from industry giants such as BlackRock to small Pennsylvania venture-capital outfits, that invest PSERS' billions in private and public companies around the globe. A smaller number, led by Montgomery County-based adviser Hamilton Lane, serve as middlemen between PSERS and the money managers, helping the agency evaluate their performance. Some serve as accountants.
  Just because the commission is investigating doesn't mean "that we have concluded that PSERS or anyone else has violated the law" or that the agency has "a negative opinion" of anyone, senior SEC enforcement counsel Heidi M. Mitza wrote in the subpoena. "We are trying to determine whether there have been any violations of the federal securities laws."
  "Unfortunately we can't discuss this matter," Kate McGann, a spokesperson for Hamilton Lane, said of the SEC subpoena.
  In part, the SEC demands repeat those made previously by federal prosecutors in their initial flurry of subpoenas served on PSERS, the taxpayer-funded Public School Employees' Retirement System.
  In the subpoena, the SEC takes pains to ask about not only fund employees receiving gifts, but also about any gifts that staff may have given outsiders.
  The securities agency in the subpoena specifically seeks information about trips taken by staff.
  In April, The Inquirer published an article that for the first time revealed the heavy spending by 40 or so members of the fund's elite investment office as its financial experts traversed the world to check on investments.
  The article detailed hotel charges that included a $1,178 overnight stay in New York for one staffer, a $1,144 overnight stay in Boston, and a $955 overnight stay in Beverly Hills, among others. Plane costs were even more expensive, paced by a round-trip fare to London for $15,627. That was one of 15 trips for which the fare was more than $11,000.
  Under a complex arrangement, the outside money managers booked all the travel arrangements and paid their costs initially. However, the managers later billed the pension plan for the expense. Thus, the pension fund says the trips were not gifts.
  The fund has abandoned this method of handling travel. It now says it will pay its own way from the start.
  More than 100 contractors — a majority — have charged PSERS staff travel to their own accounts since 2017, according to fund data.
  Daniel Hawke, a partner at Washington law firm Arnold & Porter who formerly headed the SEC's Philadelphia office, said in an interview that the commission looks at violations of an agency's own policies and of federal securities and investment laws.