WEST WARWICK, R.I. (WPRI) - A former powerful state senator and an investment advisor arenamed on a subpoena in a U.S. Securities and Exchange Commissioninvestigation into a West Warwick pension deal.
In an Aug. 13 e-mail from West Warwick Town Manager James Thomasto town councilors obtained by Target 12, Thomas reveals who isunder the federal microscope in the probe.
"Just so no one is surprised, late Wednesday afternoon August11th my office received a subpoena from the U.S. Securities &Exchange Commission requesting 21 documents," Thomas writes in thee-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 FargoAdvisors Financial Network, LLC, Stephen Alves, Jeffrey Bogosian,First Discount Brokerage Inc."
The e-mail states the SEC is looking into the town’s $3million dollar investment in an Arizona-based real estate firm,Cole Credit Property Trust III, managed by Cole Capital. Theboard's investment in the firm came despite strong objections fromthe pension board's own portfolio manager, P-Solve Asset Solutions.P-Solve later resigned. The firm was critical of Cole's feestructure.
In a statement to Eyewitness News, Cole Capital said:
"The SEC document request appears to focus on allegedrelationships between town officials and the independent financialadvisor that introduced the investment to the town. We intend tocooperate with the SEC."
Bogosian, who is on the SEC's list according to the TownManager's email, is the investment broker who introduced the dealto the town. He is an employee with Winchester InvestmentSecurities. A worker answering the phone at the firm said Bogosianis away on vacation and was not available for comment.
Target 12 has learned Bogosian works in the same downtown officebuilding as another on the SEC's list: former State Senator andChairman of the powerful Senate Finance Committee Stephen Alves.His firm "Dorrance Street Financial" is listed in the same buildingon 127 Dorrance street in Providence.
Alves is also listed as a "branch manager" on a Wells FargoAdvisors Financial Network website. Another firm on the SEClist.
Alves has not returned our calls for comment.
Both the West Warwick Pension Board's portfolio manager and theOffice of the General Treasurer blasted the decision to invest inthe real estate deal. Earlier this year Cole Capitol returned thetown's $3 Million Dollar investment along with $52,000 ininterest.
Pension Board chairman Geoffrey Rousselle said the pension boardis cooperating with the SEC's request, which is due August 24th.Rousselle supported the original investment and called theinvestigation 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 StateRepresentative and West Warwick Town Solicitor TimothyWilliamson.
"We feel it was a good investment, we did our due diligence andit was performing as expected," Rousselle said. "Unfortunately thiswill cost [the town] a lot of money in attorney's fees."
Earlier this year the town council voted to send a letter to theU.S. Attorney's office requesting an investigation into the riskyinvestment deal. Jim Martin, spokesperson for U.S. Attorney PeterNeronha, declined to comment on whether they forwarded theinformation to the SEC.
Town Council Vice President Angelo Padula said he and othermembers voted to ask for the federal probe because they wanted toget some answers.
"Things weren’t right," Padula said. "Questions that wereasked they didn't have answers for so to end all questions we askedfor the investigation."
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