SEC probes West Warwick pension deal

WEST WARWICK, R.I. (WPRI) - A former powerful state senator and an investment advisor are named on a subpoena in a U.S. Securities and Exchange Commission investigation into a West Warwick pension deal.

In an Aug. 13 e-mail from West Warwick Town Manager James Thomas to town councilors obtained by Target 12, Thomas reveals who is under the federal microscope in the probe.

"Just so no one is surprised, late Wednesday afternoon August 11th my office received a subpoena from the U.S. Securities & Exchange Commission requesting 21 documents," Thomas writes in the e-mail.

He goes on to write the SEC is requesting all contracts, agreements and notes involving the following parties:

"Cole Credit Property Trust Inc, P-Solve Asset Solutions, Winchester Investments Securities, the Townsend Group, Wells Fargo Advisors Financial Network, LLC, Stephen Alves, Jeffrey Bogosian, First Discount Brokerage Inc."

The e-mail states the SEC is looking into the town’s $3 million dollar investment in an Arizona-based real estate firm, Cole Credit Property Trust III, managed by Cole Capital. The board's investment in the firm came despite strong objections from the pension board's own portfolio manager, P-Solve Asset Solutions. P-Solve later resigned. The firm was critical of Cole's fee structure.

In a statement to Eyewitness News, Cole Capital said:

"The SEC document request appears to focus on alleged relationships between town officials and the independent financial advisor that introduced the investment to the town. We intend to cooperate with the SEC."

Bogosian, who is on the SEC's list according to the Town Manager's email, is the investment broker who introduced the deal to the town. He is an employee with Winchester Investment Securities. A worker answering the phone at the firm said Bogosian is away on vacation and was not available for comment.

Target 12 has learned Bogosian works in the same downtown office building as another on the SEC's list: former State Senator and Chairman of the powerful Senate Finance Committee Stephen Alves. His firm "Dorrance Street Financial" is listed in the same building on 127 Dorrance street in Providence.

Alves is also listed as a "branch manager" on a Wells Fargo Advisors Financial Network website. Another firm on the SEC list.

Alves has not returned our calls for comment.

Both the West Warwick Pension Board's portfolio manager and the Office of the General Treasurer blasted the decision to invest in the real estate deal. Earlier this year Cole Capitol returned the town's $3 Million Dollar investment along with $52,000 in interest.

Pension Board chairman Geoffrey Rousselle said the pension board is cooperating with the SEC's request, which is due August 24th. Rousselle supported the original investment and called the investigation a waste of taxpayer money.

"I think it's West Warwick politics rearing it's ugly head," Rousselle said. He declined to elaborate on the comment.

Rousselle is running for the seat left open by retiring State Representative and West Warwick Town Solicitor Timothy Williamson.

"We feel it was a good investment, we did our due diligence and it was performing as expected," Rousselle said. "Unfortunately this will cost [the town] a lot of money in attorney's fees."

Earlier this year the town council voted to send a letter to the U.S. Attorney's office requesting an investigation into the risky investment deal. Jim Martin, spokesperson for U.S. Attorney Peter Neronha, declined to comment on whether they forwarded the information to the SEC.

Town Council Vice President Angelo Padula said he and other members voted to ask for the federal probe because they wanted to get some answers.

"Things weren’t right," Padula said. "Questions that were asked they didn't have answers for so to end all questions we asked for the investigation."

twhite@wpri.com