Bank of Ireland has launched an internal inquiry into its US fund manager Guggenheim Advisors in tandem with an investigation by the New York state attorney general into the bank's subsidiary.
The office of state attorney general Andrew Cuomo is investigating Guggenheim - which Bank of Ireland bought in February 2006 - as part of its inquiry into the New York state pension fund.
Mr Cuomo's office has been examining relations between the pension fund and companies which managed its money. The state's $154 billion (€108 billion) fund is one of the largest investment capital funds in the world and investment firms can earn sizeable fees from managing even a small part of it.
In early 2005 Guggenheim secured a $447 million investment from the fund. The following year two executives who run Guggenheim made large donations to the re-election campaign of the former comptroller of the state of New York, Alan G. Hevesi. Mr Hevesi won re-election last year but resigned before he was sworn in for his second term after pleading guilty to a felony count for using state workers to chauffeur his ailing wife.
A spokesman for Bank of Ireland said that Guggenheim Advisors was co-operating with the attorney general's investigation and that the bank was carrying out its own internal investigation. He said that all the regulatory authorities, including the Financial Regulator in Dublin, had been informed.
The New York Timesreported yesterday that Guggenheim Advisors' president, Patrick T. Hughes, and the firm's chairman and chief executive, Loren M. Katzovitz, each contributed $25,000 to Hevesi last October, according to New York election records.
