Commonwealth of Massachusetts | Public Employee Retirement Administration Commission
Five Middlesex Avenue, Suite 304, Somerville, MA 02145
Ph 617 666 4446 | Fax 617 628 4002 | TTY 617 591 8917 | www.mass.gov/perac
Domenic J. F. Russo, Chairman | A. Joseph DeNucci, Vice Chairman
Mary Ann Bradley | Paul V. Doane | Kenneth J. Donnelly | James M. Machado | Donald R. Marquis
Joseph E. Connarton, Executive Director
M E M O R A N D U M
TO: All Retirement Boards
FROM: Joseph E. Connarton, Executive Director
RE: SEC/Callan Associates
DATE: October 12, 2007
Recently, the Securities and Exchange Commission (SEC) took action against Callan Associates. Enclosed please find a copy of the SEC Order.
The SEC’s proceeding related to violations of the federal securities laws in failing to disclose a conflict and thereby filing misleading public disclosures. Callan disclosed that it had a contractual relationship with BNY Brokerage Inc. (BNY), it failed to disclose that it was receiving annual payments from BNY that were contingent on Callan clients generating a certain level of commission for BNY.
Please review the SEC action carefully and determine whether or not the consultant, if any, employed by your Board has any similar “preferred broker” relationships. In the event that such relationships may exist the Board should assess its impact on the Board’s portfolio.
I hope this is helpful to you and if you have any further questions or comments please contact me.
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