Retired CALPERS Chief Charged with Fraud

April 24th, 2012
in econ_news

Econintersect:  Retired CEO of the California Public Employees’ Retirement System (CalPERS), Federico R. Buenrostro, has been charged with fraud by calpers-logothe SEC (Securities and Exchange Commission).  Buenrostro is alleged to have aided his friend Alfred J.R. Villalobos in a shakedown of New York-based private equity firm Apollo Global Management.  The CalPERS CEO signed documents certifying falsely that fees totaling more than $20 million dollars should be paid by Apollo to ARVCO Capital Research, Villaobos’ firm.  The documents were fabricated with a false CalPERS logo by Villalobos and then signed by Buenrostro, the SEC alleges.  Apollo reportedly paid the fees which were actually not legally due.

Follow up:

The assertion is that the actions were triggered by new procedures implemented by Apollo in 2007 which required disclosure by CalPERS of so-called “placement agent fees.”  When ARVCO’s request for the disclosure letter was not approved by CalPERS legal counsel the scheme was hatched to circumvent the approval channel, according to the SEC complaint.

These charges have not come out of the blue; The Los Angeles Times mentioned this over a year ago when reporting on other inappropriate activities:

In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms.

A 17-month investigation also found that Federico Buenrostro Jr. -- along with former pension fund board members Charles Valdes and Kurato Shimada –- strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro.

John Lounsbury

Sources:









Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.















 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved