By Karen Freifeld

NEW YORK, Feb 26 (Reuters) - The U.S. Securities and Exchange Commission is in settlement discussions with four people who pleaded guilty to criminal charges in New York for their roles in a "pay to play" scheme involving the state pension fund, according to a court filing.

The settlement discussions stem from a probe by the SEC and former New York attorney general Andrew Cuomo, now the state's governor, of money managers and placement agents in connection with access to the New York state Common Retirement Fund.

The investigation revealed how politics and placement fees resulted in favored treatment by public pension funds nationwide.

In a letter filed Feb. 25 in federal court in Manhattan, the SEC said it had "made progress" toward a resolution of claims with Henry "Hank" Morris, the former political consultant at the heart of the New York scheme; David Loglisci, the former chief investment officer at the pension fund; Julio Ramirez, a former Los Angeles placement agent; and Saul Meyer, the founder of the Dallas-based pension consultant Aldus Equity.

The SEC's letter was sent to U.S. District Court Judge Paul Oetken to notify him that all the defendants had been sentenced in connection with their parallel criminal case. Meyer was the last to be sentenced, in December 2012.

The four in settlement talks are among eight people who pleaded guilty in New York state court for their roles in the scheme. Another six, including Steve Rattner, co-founder of private equity firm Quadrangle Group LLC, and over 20 firms agreed to civil settlements and paid more than $170 million.

Former New York state comptroller Alan Hevesi, who ran the pension fund from 2003 to 2006, during the period the corruption occurred, went to prison. He pleaded guilty to illegally receiving $1 million in gifts and campaign donations. He was freed in December.

Morris, who pleaded guilty to securities fraud, is still incarcerated. As part of his guilty plea, he agreed to forfeit $19 million in fees that he received through 23 investments for which he acted as an undisclosed placement agent, according to authorities.

'CULTURE OF CORRUPTION' ALLOWED

Loglisci, who also pleaded guilty, received a conditional discharge in October for allowing a "culture of corruption" at the fund.

Meyer also received a no-jail sentence. He pleaded guilty to fraud charges for paying Morris $300,000 in return for getting money from the pension fund to invest. As part of his conviction, he paid $1 million in restitution.

Ramirez pleaded guilty in 2009 to a misdemeanor violation of a state securities fraud statute. He was sentenced in January 2012 to a conditional discharge, provided he forfeited $289,000 in the criminal case.

Ray Harding, former chair of New York's Liberal Party, admitted in the criminal case in 2009 that he wrongly took $800,000 in fees from transactions with the pension fund. He has since died.

In its letter, the SEC said it had already entered a partial final consent judgment as to Barrett Wissman, former managing director of Dallas-based hedge fund HGV Management. The letter said the SEC deferred disposition of monetary relief pending a consensual resolution or court decision.

Wissman gave $600,000 in kickbacks to a political consultant between 2004 and 2007 in exchange for a $100 million investment by the New York pension fund in an HFV fund, according to authorities.

Wissman was allowed to withdraw his 2009 felony plea in the case in September. He paid $12 million as part of a plea agreement with the New York attorney general. He pleaded guilty to a misdemeanor and received no jail time and a conditional discharge.

William Schwartz, who represents Morris, declined to comment on the SEC's letter.

Paul Shechtman, who represents Meyer, also declined to comment.

Loglisci was not required to make any payments as part of the resolution of the criminal case, according to his lawyer.

"We are hopeful this will resolve shortly and Mr. Loglisci can move on with his life," Loglisci's lawyer, Kevin Keating, said.

Michael Gardner, who represents Wissman, had no immediate comment.

A lawyer for Ramirez could not immediately be reached for comment.

The case is SEC v. Henry Morris, 09-02518, U.S. District Court, Southern District of New York.

For SEC: Dominick Barbieri.

For Morris: William Schwartz of Cooley.

For Meyer: Paul Shechtman of Zuckerman Spaeder.

For Loglisci: Kevin Keating of the Law Office of Kevin Keating.

For Wissman: Michael Gardner of Bickel & Brewer.

For Ramirez: Not immediately available.

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