NEW YORK (Legal Newsline) - Private equity firm Riverstone Holdings is paying $30 million in restitution as part of a settlement with New York Attorney General Andrew Cuomo.

Cuomo's investigation of Riverstone was part of his attempt to reform the public pension fund investment system, and the company has adopted Cuomo's code of conduct. The $30 million is being paid to the New York State Common Retirement Fund.

"Riverstone is the second to adopt our code of conduct, which reforms the public pension fund system by ending pay-to-play campaign contributions and the use of intermediaries to sell access to public money," Cuomo said.

The Caryle Group was the first company to adopt the code of conduct, which bans campaign contributions to those who control public pension funds. It also bans investment firms from using placement agents, lobbyists or other third-party intermediaries.

Cuomo has been joined in his investigation by more than 30 states. He started by digging into former Comptroller Alan Heyesi.

Cuomo said Carlyle retained Hank Morris as a placement agent in 2003 to obtain investments from the New York Common Retirement Fund. Morris was the chief political aide to Heyesi.

Carlyle obtained approximately $730 million in investment commitments from the CRF, and the company paid Searle & Company, the broker-dealer associated with Morris, nearly $13 million in placement fees, Cuomo said.

The "lion's share" of those fees were paid to a company controlled by Morris, Cuomo said

Criminal charges have been filed against Morris. Cuomo has subpoenaed more than 100 investment firms.

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.