UC Berkeley’s College of Letters and Sciences hired Deborah Kelley, who pleaded guilty to a federal fraud case in September 2017, as a major gifts assistant.
As a managing director of institutional fixed income sales at Sterne Agee & Leach, Kelley engaged in illegal bribery with Navnoor Kang, former director of fixed income and head of portfolio strategy for the New York State Common Retirement Fund, or NYSCRF. At the time, Stifel Financial Corporation, or Stifel, had owned Sterne Agee & Leach, but in 2016 it was sold to INTL FCStone by Stifel.
As of press time, Kelley could not be reached for comment.
Kelley provided Kang with free concert tickets and a ski trip, while Gregg Schonhorn, another broker, provided bribes “in the form of entertainment, travel, lavish meals, prostitutes, nightclub bottle service, narcotics, luxury gifts, and cash payments,” in exchange for Kang driving more than a million dollars of business from the NYSCRF toward Sterne Agee & Leach. Kelley was explicitly prohibited from engaging in these types of transactions by her firm, according to a 2016 indictment on the bribery case.
Because Kelley’s actions brought in more than $100 million of business between Stifel and the NYSCRF, she gained approximately 35 to 40 percent of the commissions in 2015 and 2016.
Kelley received “fixed income business” from NYSCRF as long as she continued bribing Kang with goods such as concert tickets and skiing trips.
She had already been relieved of her duties at Sterne Agee & Leach by 2016, when she was caught falsifying expenditure reports to make sense of the bribes she had been giving Kang, according to a Bloomberg article. When she and Kang were called by the U.S. Securities and Exchange Commission to explain their actions, they cooperated to commit perjury with a false story in their 2015–16 trial.
Kelley pleaded guilty to committing securities fraud. She escaped potential prison time, however, and is now facing three years of probation, with six months of house arrest, 1,000 hours of community service and a $50,000 fine after forfeiting $187,991.90.
A previous version of this article incorrectly stated that Deborah Kelley provided Navnoor Kang with bribes “in the form of entertainment, travel, lavish meals, prostitutes, nightclub bottle service, narcotics, luxury gifts, and cash payments.” In fact, Kelley’s bribes came mainly in the form of concert tickets and a skiing trip; the other bribes were provided by Gregg Schonhorn.