A newly assembled coalition of critics has called for an investigation into New York’s pension funds to find out whether their huge accounts support the seedy world of third-party legal lending.
a wide range of groups – Representing businesses, workers and governments – Asking State Auditor Tom DiNapoli and City Auditor Brad Lander to take a closer look at how pension funds may be investing in hedge funds that profit from legal loans. I asked for it.
“This industry’s vicious business model uses high interest rates to prey on injured New Yorkers, and our cities and towns, schools, hospitals, and other public institutions are footing the bill.” the group wrote in a letter obtained by the Post.
“We will conduct a thorough investigation into whether New York state pensions have been exposed to these predatory practices and will subsequently take appropriate fiduciary actions related to this disclosure, including the full divestiture of the pension funds from TPLF funders. “We recommend that action be taken,” the letter continued.
The letter was signed by groups including Associated Builders and Contractors of New York State, the New York State Business Council, the New York State Litigation Reform Alliance, the Health Care Professionals Liability Association, and the New York Conference of Mayors.
They argue that third-party litigation funding is a wild sector that encourages individuals to file often frivolous lawsuits against employers and governments by providing loans to plaintiffs at exorbitantly high interest rates. It is criticized that there is.
It’s unclear exactly how much of the state and city’s billions of dollars in pension fund assets will be invested in this area.
The city’s pension fund has invested more than $250 million in Fortress Investment Group. – a fund called Expanded In recent years, he has also entered the litigation finance field.
Neither State Comptroller Tom DiNapoli nor New York City Comptroller Brad Lander responded to requests for comment.
“I think it’s time to start looking at ways to make sure there are some guardrails around third-party litigation funding,” said Paul Zuber, executive vice president at the Business Council. Ta.
“I think both city and state auditors need to start looking at the health of their own pension funds based on some of these things,” he continued.
“If you’re investing in these schemes, they’re charging you 100-200% interest on your loans. That doesn’t seem like something a pension fund should be supporting,” said Associated Builders. said Brian Sampson, president of & Builders. New York State Contractor.
“They should consider investing their money in things that actually help the public, especially pensioners, instead of investing in things that could ultimately harm them.” he added.
The same group has spent years pushing Albany to enact legislation that would place restrictions on litigation funding.
A Fortress spokesperson did not respond to a request for comment.
