Pershing Square, 9 others hit with U.S. SEC ‘pay to play’ violations

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By Sarah N. Lynch and Svea Herbst-Bayliss | WASHINGTON

WASHINGTON Billionaire investor Bill Ackman’s
hedge fund paid $75,000 to settle civil “pay-to-play” charges
with the Securities and Exchange Commission after running afoul
of campaign contribution and money management rules.

Pershing Square Capital Management, which invests roughly
$11.6 billion for a number of state pension funds and wealthy
investors, was one of 10 firms that settled charges with the SEC
after having allegedly received compensation from pension funds
within two years of making political contributions, U.S.
regulators said.

The Securities and Exchange Commission said Pershing and the
other nine firms agreed to settle the charges by paying
penalties ranging from $35,000 to $100,000. All the firms
settled without admitting or denying the charges.

Pershing Square last year said a former partner at the firm
made a $500 campaign contribution to a friend’s sister’s
campaign to run for governor in Massachusetts, where Pershing
Square manages money for the state’s pension fund. The candidate
did not gain enough votes to make it onto the primary ballot.

The hedge fund, which called the contribution an “unintended
violation, asked the regulator to exempt it from having to
return millions of dollars in fees it earned for managing the
money for Massachusetts.

Regulators have recently paid significantly more attention
to deals that investment firms have made with pension funds in
order to try and steer business their way. The governor in
Massachusetts appoints members to the pension fund’s board which
votes on which investment managers to employ.

Ackman’s Pershing Square, one of the world’s most closely
watched hedge funds, ended 2016 and 2015 with heavy losses. It
began 2017 on a positive note, with the Pershing Square Holdings
fund up roughly 2 percent so far this month, starting the new
year with gains for the first time in two years.



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