Report: Calpers Official Named In Probe Resigns

(Reuters) – A Calpers investment officer named in a fraud lawsuit by California Attorney General Jerry Brown’s office against the pension fund’s former chief executive and a placement agent has resigned from the fund, The Sacramento Bee said on Thursday.

Malcolm Segal, a lawyer in Sacramento, told the newspaper that Leon Shahinian has stepped down as a senior investment officer at Calpers, the $205 billion California Public Employees’ Retirement System.

Shahinian had been on paid administrative leave from the largest U.S. public pension fund since May, the Bee said.

Brown’s office in May charged former Calpers CEO Federico Buenrostro Jr and placement agent and former Calpers board member Alfred Villalobos with fraudulent broker-dealer activities involving $4.8 billion in investments at the fund.

Brown’s office claimed Villalobos had attempted to bribe Shahinian, responsible for managing the Alternative Investment Management Program at Calpers, and that Buenrostro instructed Shahinian to build a closer relationship with Villalobos, who was trying to persuade the fund to buy an equity stake in Apollo Global Management [APOLO.UL].

Shahinian accepted an invitation by Villalobos to travel by private jet to New York to attend a fund-raising event in May 2007 to honor Apollo founder Leon Black, according to Brown’s office.
A month after the $63,000 junket, Shahinian during a closed meeting of the Calpers board recommended it authorize an investment of up to $700 million in Apollo without disclosing his all-expenses-paid trip to New York, the complaint by Brown’s office said.
Segal told the Bee that Shahinian is pursuing opportunities in private industry.