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Alternative Market Briefing

SEC charges former CalPERS CEO and friend with falsifying letters in $20m placement agent fee scheme

Tuesday, April 24, 2012

Bailey McCann, Opalesque New York: The Securities and Exchange Commission (SEC) has charged the former CEO of the California Public Employees' Retirement System (CalPERS), Federico R. Buenrostro and his friend Alfred J.R. Villalobos with scheming to defraud an investment firm into paying $20 million in fees to the friend's placement agent firms. The SEC alleges that Buenrostro and Villalobos fabricated documents given to New York-based private equity firm, Apollo Global Management. Those documents gave Apollo the false impression that CalPERS had reviewed and signed placement agent fee disclosure letters in accordance with its established procedures.

According to the complaint, both men intentionally bypassed those procedures to induce Apollo to pay placement agent fees to Villalobos's firms. The false letters bearing a fake CalPERS logo and Buenrostro's signature were provided to Apollo, which then went ahead with the payments. The false letters apply to at least five Apollo funds, requiring in all $20 million in placement agent fees that Apollo otherwise wouldn't have paid.

The SEC is asking for Buenrostro and Villalobos to return the fees, pay penalties and be be permanently enjoined from violating the antifraud provisions of the federal securities laws.

According to the ......................

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