SANTA FE, N.M. (AP) — New Mexico would be paid more than $24 million under a settlement negotiated with a financial firm to resolve claims in an alleged pay-to-play scandal involving state investments.

If approved by a court, the settlement announced Friday would provide the State Investment Council with $20 million and the teacher pension fund with $4.25 million.

The settlement to be paid by the Chicago-based financial firm of Vanderbilt Capital Advisors heads off possible litigation based on a state law against defrauding taxpayers, the State Investment Council said. The agency contends that some New Mexico investments were steered to political supporters of former Democratic Gov. Bill Richardson and that a broker with ties to Richardson received millions in fees for helping companies secure investment business with the state and the pension fund.

New Mexico's announcement of the settlement said the state believes its claims against Vanderbilt were well-founded and valid but that Vanderbilt contends it had legal and factual points on its side.

The investments in complex mortgage securities called collateralized debt obligations were approved in 2006.

The state lost its investment when values dropped sharply because of a credit crisis and financial market meltdown that caused investors to abandon all but the safest forms of debt.

No criminal charges have been filed in the alleged scandal, and Richardson and Vanderbilt officials have denied wrongdoing.

In a motion filed in Santa Fe District requesting approval of the settlement, the state said it suffered $100 million in losses but might not be able to prove in court that it's owed that much in damages.

"The choice was an obvious one: Recover tens of millions of dollars today, or roll the dice in court, wait several more years, and face a very uncertain outcome," State Investment Officer Steve Moise said in a statement.

The state's motion said the settlement "reasonably reflects Vanderbilt's share of the fault for its damages."

Gov. Susana Martinez, head of the State Investment Council, called the agreement a "significant recovery of money for the taxpayers of New Mexico."

The motion said the state plans to continue to press litigation against a dozen individuals.

In addition, the motion said the state plans to try to negotiate settlements with fund managers like Vanderbilt that it believes "received investments in exchange for political favors." However, lawsuits may prove necessary, the motion said.