The Carlyle Group, a politically connected firm, has been under investigation by Cuomo for its role in using intermediaries to obtain investments through the state’s pension fund.
The firm agreed to pay $20 million to the state to settle the investigation.
Carlyle also agreed to adopt a new code of conduct in relation to public pension funds across the country.
“This is a revolutionary agreement,” Cuomo said in a conference call with reporters. “I believe it totally changes the way people operate. It bans pay to play.”
For two years, Cuomo’s office has been investigating the investments of the $120 billion pension fund, which is under the sole control of the state comptroller.
Cuomo has already charged several investors and politically connected people, including former Liberal Party Chairman Raymond Harding and former Comptroller Alan Hevesi’s political consultant Hank Morris.
They are accused of receiving millions of dollars in kickbacks from companies that received investments with the pension fund.
Carlyle is accused of paying nearly $13 million to Searle & Company, a firm associated with Morris, for placement with New York’s pension fund.
The agreement with Carlyle includes a code of conduct that bans investment firms from using placement agents, or middlemen, to get state pension business.
The firm also agreed to not do business with a public pension fund for two years after the firm makes a campaign contribution to an elected or appointed official who has influence over states’ pension funds.
Firms would also be banned making campaign contributions in the future to officials connected to pensions.