PA Treasurer Joe Torsella Bans Middleman Fees for Treasury Investment Contracts

Treasury will maintain an “open-door” policy when considering all investment opportunities

Harrisburg, PA – Pennsylvania Treasurer Joe Torsella today announced that as his first official act in office, he has instituted a formal ban on all investment contracts that include third-party agreements that pay a middleman finder's fee as a reward for acquiring Treasury investment contracts. Immediately following his swearing-in yesterday, Torsella signed a policy directive instituting the ban, which is effective immediately, covers all current and future agreements, and directs Treasury’s chief counsel to inform all Treasury investment managers. Any current investment manager that has an agreement containing a finder’s fee must end that provision within 30 days to continue to manage public funds on behalf of Treasury.

"Yesterday at my swearing-in, I pledged to lead a Treasury Department that sets a new standard for accountability. Banning these agreements is an important step in that direction. These finder’s fees do not provide improved investment performance for taxpayers, have only served to undermine public trust, and add a layer of unnecessary expenses. Under my leadership, Treasury will award contracts that undergo extensive due diligence and make sense for Pennsylvania."

Pennsylvania Treasurer, Joe Torsella


Treasury will maintain an “open-door” policy and consider and evaluate all investment proposals from financial advisors and fund managers. Every opportunity will be subjected to a rigorous legal and financial review and must align with Treasury’s investment strategy and objectives.

The fees associated with these arrangements, which are also known as placement or solicitor agreements, are paid by investment companies to individuals who solicit investment contracts with government organizations with whom they have some past or current relationship. Eliminating the cost of these agreements should reduce investment costs for taxpayers by capturing the savings associated with solicitor agent expenses.

Accusations of improper conduct involving these agreements have occurred in Pennsylvania and elsewhere. The U.S. Securities and Exchange Commission has imposed registration requirements on solicitor agents and California, North Carolina and the New York City Pension Boards have also adopted limits on the use of these agreements.

Access copy of policy directive

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