A former Sterne Agee & Leach managing director pleaded guilty to lavishing a portfolio manager at New York state’s pension fund with trips to luxury vacation destinations in exchange for steering hundreds of millions in trading business her way.
Deborah Kelley, 59, a resident of Piedmont, California, was accused of spending tens of thousands of dollars to pay for trips for Navnoor Kang and his girlfriend to New Orleans and Park City, Utah, and VIP tickets to a Paul McCartney concert. She expensed the costs to Sterne Agee, while omitting that the money was spent entertaining Kang, prosecutors said.
Kelley pleaded guilty to conspiracy to commit securities fraud and honest services fraud, and she could face five years in prison when she is sentenced September 15.
Kang was also charged with fraud and has pleaded not guilty.
Kelley said she first got to know Kang when he worked at a prior employer and invited him on the ski trip to Utah after he joined the New York pension fund. She said she knew he wasn’t allowed to accept such gifts and understood that he didn’t intend to disclose them.
The guilty plea proceeding was temporarily thrown into disarray when Kelley, in response to a question from U.S. District Judge J. Paul Oetken in Manhattan, said she didn’t know at the time that what she was doing is illegal.