UPDATE 1-NYS teachers pension OKs Cuomo pay-to-play curbs

* NY state teachers' fund adopts Cuomo's pay-to-play curbs * Fund's decision follows NYC comptroller's recommendation (Adds details in new paragraphs 3-12 and byline)

By Joan Gralla

NEW YORK, May 21 (Reuters) - The New York State Teachers Retirement System said on Thursday it adopted pay-to-play curbs in a conduct code the state attorney general devised in a settlement with The Carlyle Group [CYL.UL].

The state teachers' pension fund has recently been revalued at $68 billion, down from a previous asset total of $75 billion earlier this year.

Democratic State Attorney General Andrew Cuomo, who is investigating millions of dollars of kickbacks he says investment firms paid to politically connected placement agents to win pension contracts, wants all such middlemen banned, and is seeking stricter limits on campaign contributions.

About 41 percent of the $85 billion of the assets Carlyle invests is for global public pensions. A week ago, on May 14, the private equity fund reached a $20 million settlement with Cuomo for its role in his pension probe.

Carlyle had hired Henry Morris, one of the principal figures in the investigation, who has been indicted. Morris was the former Democratic state comptroller's fund raiser. Morris' attorney has said his client is innocent.

The private equity fund also agreed to apply Cuomo's reforms throughout the nation, but so far, few of Carlyle's peers or other pension funds outside of New York state have announced they will follow the attorney general's new rules.

The New York state teachers' fund said in a statement that after a "thoughtful review," it was adopting "applicable" rules from Cuomo's code, noting that, for example, it is run by an independent board that does not include elected officials.