Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Stephen Schwarzman (Schwarzman), currently associated with Blackstone Securities Partners L.p., has at least one disclosable event. These events include one customer complaint, alleging that Schwarzman recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint on July 29, 2020.
This is a lawsuit brought by the Kentucky Attorney General purportedly on behalf of the Kentucky Retirement Systems and the Commonwealth of Kentucky. The Kentucky Attorney General’s lawsuit incorporates the claims first raised in the lawsuit commenced on December 26, 2017, which is the subject of a DRP filed by the registrant on February 5, 2018. Specifically: On December 26, 2017, the registrant was named as a defendant in a purported derivative lawsuit brought by eight individual pension beneficiaries on behalf of the Kentucky Retirement Systems (‘KRS’), filed in Franklin County, Kentucky, Circuit Court (the ‘Circuit Court’). The defendants in the suit included the registrant, The Blackstone Group L.P. (now Blackstone Inc.), Blackstone Alternative Asset Management L.P. (‘BAAM’) and the then CEO of BAAM (the ‘Blackstone Defendants’), as well as other investment managers and their executive officers, current and former KRS trustees and officers, and several outside advisors. The lawsuit concerned, among other issues, KRS’s investment in a BAAM-managed fund, and alleged state law claims for breach of trust, fiduciary, and unspecified other duties; civil conspiracy; and aiding and abetting breach of statutory, fiduciary, and unspecified other duties. After numerous motions and appeals, in July 2020, the Kentucky Supreme Court unanimously ordered the dismissal of the complaint because plaintiffs lack standing. In July 2020, the Kentucky Attorney General filed a motion to intervene in the action and pursue the claims on behalf of the Commonwealth of Kentucky. Also in July 2020, the Kentucky Attorney General filed a separate action which is substantially the same as its intervening complaint. In December 2020, the Circuit Court granted the Attorney General’s motion to intervene over the defendants’ objections. In April 2023, the Court of Appeals vacated the Circuit Court’s order authorizing the Attorney General’s intervention. In January 2024, the Kentucky Supreme Court denied the Commonwealth’s motion for discretionary review of the Court of Appeals’ decision. After the Court of Appeals’ decision, the Attorney General pursued Civil Action No. 20-CI-00590. On May 1, 2024, the Circuit Court denied Blackstone Defendants’ (and most other defendants’) motions to dismiss. While that motion was pending, the court permitted the Attorney General to amend its complaint for the third time to add a claim for breach of contract. On April 8, 2024, the Kentucky Attorney General filed an action, Civil Action No. 24-CI-00354, that involves the same subject matter, names the same parties as defendants, and brings the same claims as the operative complaint in Civil Action No. 20-CI-00590. The Attorney General has stated its purpose in filing the new action was to satisfy a limitations statute. On May 1, 2024, the Circuit Court granted the Commonwealth’s motion to consolidate Civil Action No. 24-CI-00354 with Civil Action No.00590. On January 3, 2025, certain defendants, including the Blackstone Defendants, entered into a settlement agreement with KRS and the Commonwealth of Kentucky. The settlement, which is subject to court approval and to certain contingencies, would be funded entirely by insurance and would resolve all claims against the Blackstone Defendants in Civil Action No. 20-CI-00590 and Civil Action No. 24-CI-00354. On January 8, 2025, the settling parties moved for court approval of the settlement. That motion is pending.