Placement agents long have served as a conduit between hedge fund managers and institutional investors.  Placement agents provide managers with a range of marketing services, including introductions to capital sources, honing of marketing materials and presentations and explanations of how managers’ strategies can address investors’ goals.  However, that arrangement has come under pressure, in light of a sweeping indictment filed by the New York State Attorney General Andrew Cuomo and a parallel civil complaint filed by the SEC, both alleging that certain New York State officials conspired to condition access to investments by the state’s pension fund on the payment of kickbacks to state officials or their associates.  In addition, at least one former hedge fund manager has pleaded guilty to paying kickbacks in exchange for state investments in a hedge fund he managed.  The pay-to-play allegations raise a series of potentially game-changing questions for placements agents and hedge fund managers that use them.  At the most extreme, they give rise to the prospect that other state pension funds will follow New York’s lead in banning the use of placement agents, and that other significant private equity and hedge fund managers will cease using placement agents.  This would cause a secular shift in the placement agency business – in effect, would convert it from a business that in large part serves established managers in ongoing fundraising efforts to a business that primarily serves smaller, start-up managers.  A less draconian – and more certain and immediate – effect of the events will be to cause managers to scrutinize their placement agent relationships (current and new) significantly more closely, and to build more robust protections into their agreements with placement agents.  We explore the implications of the pay-to-play allegations for hedge fund managers and investors, and placement agents.