By Tony McVeigh
Frankfort, KY – State Auditor Crit Luallen says she found no evidence of wrongdoing in an audit of the Kentucky Retirement Systems. But as Kentucky Public Radio's Tony McVeigh reports, the audit raises several areas of concern.
The audit primarily focused on the use of placement agents, who act as middlemen to secure investments from entities like the Kentucky Retirement Systems. Placement agents have been at the center of "pay-to-play" scandals in other states, but State Auditor Crit Luallen says that does not appear to be the case in Kentucky. However, Luallen says placement agent Glen Sergeon of New York had "an unusually close working relationship" with former KRS chief investment officer Adam Tosh, who no longer works for KRS.
"That placement agent received a high percentage of the investment contracts - more than all of the other placement agents combined."
Luallen says her findings have been referred to the Securities and Exchange Commission, which is conducting an informal inquiry into the use of placement agents at KRS. The audit makes 92 recommendations, which the KRS board has already started implementing.