In May, California Atty. Gen. Jerry Brown filed a civil complaint in Los Angeles County Superior Court accusing Villalobos of employing fraudulent business practices, including falsely representing that he and his firm, Arvco Capital Research, had securities licenses. The complaint also alleges that Villalobos used "gifts and gratuities" to cultivate "improper relationships" with key officials at CalPERS.This and other scandals came to light after CalPERS experienced huge investment losses in recent years, losses for which California taxpayers will pay dearly.
"Villalobos spent tens of thousands of dollars to lavishly entertain key senior executives at CalPERS, who then influenced the board to authorize investments that generated over $40 million in commissions to Villalobos," Brown said in a statement.
The gifts allegedly included a condominium, luxury trips around the world and lucrative employment in Villalobos' firm. At a news conference, Brown, who is running for governor, said CalPERS should have applied "clearer standards of accountability and disclosure" to the lobbying that went on behind closed doors. [Emph. added]
Additionally, the LA Times accuses CalPERS of being slow to release the records related to its many scandals.
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