Lehman Mar 25

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Brazil - Postalis

1. Deficit-Ridden Pension Said to Be Investigated as Rescue Sought

   Mar 25, 2015 | Bloomberg

   By Francisco Marcelino, Paula Sambo, & Arnaldo Galvao
   
   
   The deficit-ridden pension fund for Brazilian postal workers is being investigated for alleged reckless management after several years of money-losing bets ranging from investments in Lehman Brothers bonds to Argentine debt, two people with knowledge of the matter said.

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Client Attorney Privileged/Attorney Work Product/At Request of Counsel

Brazil - Postalis

1. Deficit-Ridden Pension Said to Be Investigated as Rescue Sought

   Mar 25, 2015 | Bloomberg

   By Francisco Marcelino, Paula Sambo, & Arnaldo Galvao

   The deficit-ridden pension fund for Brazilian postal workers is being investigated for alleged reckless management after several years of money-losing bets ranging from investments in Lehman Brothers bonds to Argentine debt, two people with knowledge of the matter said.

   Pension-fund agency Previc, securities regulator CVM, the central bank and federal prosecutors are collaborating on the probe and meeting weekly to conclude a report on Postalis, Brazil’s third-largest retirement system by number of beneficiaries, said one of the people, who asked not to be named because the issue is private. The findings may be released in coming days, the person said. Under Brazilian law, the agencies may seek penalties that may include fines of as much as 1 million reais ($320,200) and a 10-year ban from managing pension funds.

   ...Lehman Brothers Losses

   Postalis bet on a fund that booked 18 million reais of Lehman Brothers debt in August 2008, one month before the New York investment bank filed for bankruptcy, according to data from Brazil’s securities regulator. It bought bonds or invested in funds of mid-sized Brazilian banks that were liquidated by the central bank in 2012 amid fraud allegations and lack of capital. Postalis was also among various pension funds that lost money when the commodities and oil empire of Brazil’s then-richest man, Eike Batista, went bust last year. Many of Batista’s companies were listed on the benchmark Ibovespa index.

   Postalis was the only investor in a fund administered by Bank of New York Mellon Corp. that held a basket of structured securities linked to Venezuela and Argentine debt. The investment has lost 65 percent of its value since Argentina defaulted in August. The fund bought the notes in December 2011, when it was managed by Atlantica Administracao de Recursos Ltda. Lawsuits

   Postalis said in the e-mail that the investment in the debt basket was made by Atlantica without its consent and that it’s suing BNY Mellon and Fabrizio Neves, Atlantica’s owner, in a Rio de Janeiro court to recover losses. Atlantica, a Sao Paulo-based asset manager that was shut in 2013, also made the decision to invest in the Lehman Brothers bonds, court document show...

   For full story:

   http://www.bloomberg.com/news/articles/2015-03-24/deficit-ridden-pension-said-to-be-investigated-as-rescue-sought
   

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