The probe of an alleged pay-to-play scheme at New York's $122 billion pension fund looks like it may keep expanding, so we're slotting it in at No. 2 on our Scandal Watch. The investigation, conducted by the SEC and New York Attorney General Andrew Cuomo, highlights the role of so-called placement agents in pension fund deals. Placement agents act as middlemen who connect investment firms seeking money from pension funds with the pension staff and board members who make investment decisions. Finders' fees paid to placement agents are legal as long they are in exchange for a legitimate service, like help putting together pitch materials.

But that's not what happened in the case of New York's pension fund, authorities say. The fund's chief investment officer, David Loglisci, allegedly made it very clear to private-equity firms and hedge funds that if they wanted an investment from the fund, they had to pay finders' fees -- essentially kickbacks -- to Hank Morris, a former political consultant. Lawyers for both Morris and Loglisci, who were indicted in March, have denied those accusations.

Meanwhile, letters sent earlier this month by the SEC to two members of the Los Angeles Fire and Police Pensions Board suggest that the investigation may be expanding beyond the New York fund.

Read more about the scandal here, along with recent coverage.