close
close

Groups are calling for an investigation into New York’s state pension funds over possible ties to “predatory” legal lenders

metro

New York’s pension funds should be investigated to find out whether the massive accounts support the shady world of legal third-party lending, a newly formed coalition of critics said.

The broad group Representing business, labor and government called on state Comptroller Tom DiNapoli and city Comptroller Brad Lander to investigate how their pension funds may be investing in hedge funds that profit from legal lending.

“This industry’s harmful business model uses usurious interest rates to exploit hurting New Yorkers — and our cities, towns, schools and hospitals, and other public institutions foot the bill,” the groups wrote in a letter obtained by the Post.

“We recommend a thorough review of New York’s pension exposures to these predatory practices, followed by appropriate fiduciary actions related to this exposure, potentially including a full divestiture of TPLF donors’ pension funds,” the letter continued.

The letter was signed by groups including the Associated Builders and Contractors of New York State, the Business Council of New York State, the Lawsuit Reform Alliance of New York, the Medical Professional Liability Association and the New York Conference of Mayors.

Brad Lander
It is unclear exactly how much the state and city pension funds invest in third-party litigation financing. LP Media
Tom DiNapoli
Critics argue that litigation funding is uncontrolled and predatory, forcing local governments into costly settlements. AP

They criticize third-party litigation funding as a completely unregulated sector that encourages individuals to file often frivolous lawsuits against employers and governments by providing plaintiffs with loans at exorbitantly high interest rates.

It’s unclear exactly how much of the state and city’s billion-dollar pension fund money will be invested in the sector.

The city’s pension funds have invested more than a quarter of a billion dollars in Fortress Investment Group a fund that has expanded into the area of ​​litigation financing in recent years.

Neither state Comptroller Tom DiNapoli nor New York Comptroller Brad Lander responded to requests for comment.

“I think it’s time to look at ways to ensure that there are some protections for third-party litigation funding,” Paul Zuber, executive vice president of the Business Council, said.

“I think the auditors, both the city and the state, need to start looking at the integrity of their own pension funds based on some of these things,” he continued.

“When you invest in these schemes, these schemes charge 100 to 200% interest on these loans, and that doesn’t seem to be something that the pension funds should be supporting,” said Brian Sampson, president of Associated Builders and Contractors of New York State.

“They should try to invest their money in things that will actually help the general public, particularly retirees, and not potentially invest in something that will ultimately harm them,” he added.

The same groups have pushed Albany for years to implement legislation regulating litigation funding.

A spokesman for Fortress did not respond to a request for comment.




Load More…





https://nypost.com/2024/05/12/us-news/groups-call-for-investigation-into-ny-state-pension-funds-over-possible-ties-to-predatory-legal-lenders/ ?utm_source=url_sitebuttons&utm_medium=site%20buttons&utm_campaign=site%20buttons

Copy the URL to share