NotiCel: Cancel Alegría and UBS referred to Justice (Retirement)

On October 11, 2011, NotiCel reported that the Justice Department already had boxes of documents on the “allegedly illegal” Retirement System transaction under former administrator Juan Cancel Alegría. Representative Lourdes Ramos asked Secretary Guillermo Somoza to open an investigation, evaluate a referral to the Independent Special Prosecutor Panel (FEI) and a possible case against UBS for conflict of interest.

Ramos delivered documents to evaluate FEI action against Cancel Alegría, Retirement Board trustees, the Government Development Bank board and the investment managers (UBS). She said the transaction was loss-making from day one and that UBS failed to deliver contractual quarterly reports on the operation’s results. Per cited minutes, the bond issue was changed three times for lack of market liquidity “and they did it anyway.”

She also gave prosecutors a federal retirees’ suit against UBS seeking $800 million for harm to Retirement. Ramos said the SEC was investigating conflicts — UBS as manager, underwriter and privileged buyer of bonds, buying after values had already risen. She alleged the transaction raised Retirement’s annual liquidity deficit from $45 million (2000) to $749 million. Somoza promised a “serious, detailed and conscientious” inquiry and actions “strictly in law.” Allegation ≠ formal charge ≠ conviction. Primary: NotiCel 2011-10-11.

Source: NotiCel. https://www.noticel.com/ahora/20111011/refieren-a-justicia-a-cancel-alegria-y-ubs/