Pension probe shines light on flick

A New York pension kickback probe by the state attorney general and the Securities and Exchange Commission now includes “Chooch,” a movie partly financed by fund managers seeking pension contracts.

The SEC has charged that David Loglisci, the state pension fund’s former top investment officer, benefited financially from investments in the movie, produced by one of his brothers, and that he failed to disclose a conflict of interest. Democratic Attorney General Andrew Cuomo has charged that David Loglisci “caused” certain fund managers to invest more than $250,000 in the movie and failed to disclose this or the conflict of interest he had due to his stake in the movie.

A spokesman for the SEC declined to comment.

Loglisci, in his 2003 annual disclosure statement with the New York State Ethics Commission, said he had “sold all interests in Rose Park Equities,” which he described as a family partnership that included film rights to “Chooch.”

The Ethics Commission recently made Loglisci’s disclosure statements available to Reuters. The statements show that he made several disclosures relating to his ties with the film. For instance, in his 2004 and 2005 disclosures, Loglisci said Rose Park Equities was sold in 2002, and he disclosed that “some money is still owed to me.” His 2004 filing said that he sold the partnership to his brother Nick Loglisci.

David Loglisci left the pension fund in 2007, and his last disclosure statement for 2006 makes no mention of Rose Park.

DVD Talk describes the R-rated movie in its online review as “an unoriginal low-budget buddy” film. The movie’s plot, according to, includes “a mix-up on the way to the airport involving a mysterious bag of money. … Only after a jail bust, donkey ride, chicken coop explosion, and a life-changing love affair at the local bordello does the crew finally arrive to save the day.”

Tami Powers, the film’s producer, told the Wall Street Journal that the movie had a budget of $1.1 million and was seen in limited release on three screens in the New York area. It also played in New Mexico and Buffalo, and then went to DVD, she said.

GoodTimes Entertainment, a company owned by PE firm Quadrangle Group, acquired the rights to publish the DVD for less than $90,000. That transaction is cited in the SEC’s complaint against Loglisci. The New York State Common Retirement Fund invested $100 million in Quadrangle, which has not been charged with any wrongdoing and is cooperating with the SEC investigation.

Big Picture

Cuomo and the SEC are investigating placement agents, paid middlemen that investment firms often hire to help them win business investing public pension funds.The central figure in both probes is Henry Morris, who was former State Comptroller Alan Hevesi’s top fund-raiser. Both the SEC and Cuomo charge that Loglisci won his job partly due to Morris’ efforts.The SEC claims Morris reaped $15 million in illegal fees because Loglisci approved investment firms Morris recommended.Lawyers for both Morris and Loglisci say their clients are innocent. Loglisci’s lawyer said in March that his client’s investments benefited the pension fund and that all of the deals were vetted by outside fiduciaries, including bankers, lawyers and attorneys.Cuomo’s indictment does not charge that Loglisci benefited from placement fees.The case against Morris partly hinges on his ability to influence pension staffers in choosing which firms they hired. Much of the probe focuses on whether fees were disclosed. If the investments were shown to have performed well, it would be harder for the SEC and Cuomo to show the public was harmed.A failure to disclose fees might violate New York securities law. —Joan Gralla, Reuters