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Judgments Entered|in CalPERS Conspiracy

RENO, Nev. (CN) - A federal judge this week enjoined former CalPERS CEO Frederico Buenrostro from committing any more securities violations, after his guilty plea in a pay-to-play conspiracy involving the nation's largest state retirement system.

Enjoined with Buenrostro were ARVCO Capital Research, ARVCO Financial Ventures, and the late Alfred J.R. Villalobos, who committed suicide a year ago.

CalPERS is the California Public Employees Retirement System.

U.S. District Judge Miranda Du on Monday granted two consent judgments against the defendants, who agreed to a permanent injunction against violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act.

Villalobos, a former Los Angeles Deputy Mayor and CalPERS board member, committed suicide in Reno on Jan. 13, 2015. He was 71.

Buenrostro, a former CalPERS CEO, pleaded guilty in July 2014 to conspiracy to commit corruption and fraud by channeling deals through Villalobos to third parties looking to manage CalPERS' $300 billion investment portfolio.

The SEC in 2010 accused Buenrostro and Villalobos of fabricating documents given to private equity firm Apollo Global Management that gave the "false impression CalPERS had reviewed and signed placement agent fee disclosure letters in accordance with its established procedures," tricked Apollo into paying more than $20 million in fees to Villalobos' ARVCO firm, and concealed the fees payments from CalPERS investors.

In his guilty plea, Buenrostro admitted he accepted $250,000 in bribes and other gifts from Villalobos. He will be sentenced on May 18.

Without admitting or denying guilt, Buenrostro, ARVCO Capital Research and ARVCO Financial Ventures consented to the entry of judgment that enjoins and restrains them from violating the Securities Act and the Exchange Act.

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