A second person pleaded guilty in a kickback scandal involving New York state's $122 billion pension fund, Attorney General Andrew Cuomo said on Tuesday.

Former Wetherly Capital Group associate Julio Ramirez pleaded guilty to a criminal misdemeanor charge, which Cuomo said stemmed from corrupt arrangements between Ramirez and Henry Morris, a top fund-raiser for New York state's former comptroller.

Ramirez and Morris were paid hundreds of thousands of dollars from multiple deals with the New York state pension fund, the Democratic attorney general said in a statement.

Cuomo, whose probe has been joined by the Securities and Exchange Commission and 36 other states, said: This investigation has uncovered a matrix of corruption, which grows more expansive and interconnected by the day.

The probe, already linked to New Mexico and California public pensions, is scrutinizing a web of investment firms and the placement agents, lawyers, and lobbyists whom the firms hire to help them get selected to manage public pension funds.

Former hedge fund manager Barrett Wissman pleaded guilty to a felony in the kickback scheme in mid-April.

Ramirez's lawyer said in a statement that his client had accepted responsibility for violating New York's Martin Act several years ago and is cooperating with the New York State Attorney General's office in its investigation.

The Martin Act is the state securities law, and the lawyer added his client wished to apologize to his friends and family.

On Tuesday, the SEC charged Ramirez with seeking kickbacks from Dallas-based Aldus Equity Partners and taking part in a multimillion-dollar kickback scheme with New York's pension fund.

SEC cases are often filed with the court as settled cases, but both parties must agree to any settlements, and a source familiar with the issues said Ramirez was in the process of reaching a settlement with the SEC. It's just a timing issue on their end, said the source, who requested anonymity.

The SEC wants a court to order Ramirez to disgorge ill-gotten gains with prejudgment interest, and financial penalties and grant permanent injunctions against any future securities law violations.

A Cuomo spokesman was not immediately available to say what penalties the attorney general was seeking.

The so-called pay-to-play scheme ensnared Morris, who was accused in April of taking kickbacks to help investment firms win business from the New York's pension fund when it was managed by former State Comptroller Alan Hevesi.

Hevesi has not been charged. Lawyers for Hevesi, Morris, and Raymond Harding, the former head of New York's Liberal Party who also faces criminal charges, have previously said their clients were innocent.

Wetherly founder Dan Weinstein said his firm engaged Morris in 2003 as a sub-agent at the recommendation of Ramirez, then a part-time employee, and has cooperated with investigators.

In response to inquiries made by regulators last year -- the first request we received for information on this subject -- Wetherly disclosed all payments for work performed by Mr Morris, the means of payment, and the amounts, Weinstein said in a statement provided to Reuters.

Wetherly has fully cooperated with all regulators, including the New York Attorney General, in their inquiries relating to this matter and will continue to do so, Weinstein said. With respect to Julio Ramirez, we do not know the nature of the acts that are the subject of the misdemeanor charge announced earlier today by Attorney General Cuomo.

Ramirez also had worked from mid-2005 through March 2009 for The Park Hill Group, a placement agent arm of The Blackstone Group, an alternative asset manager.

Blackstone spokesman Peter Rose said an internal review of Ramirez's work at Park Hill has not found any unusual dealings and that his departure was entirely voluntary and based on lifestyle reasons and a desire to start a business.

We found nothing that would indicate that he would have violated our own standards of conduct or evaded somehow our controls, Rose said.

(Reporting by Joan Gralla in New York, Kim Dixon in Washington, D.C., Jim Christie in San Francisco, and Anurag Kotoky in Bangalore; Editing by Gary Hill)

California New York