The Fiscal Control Board (FCB) kept silent regarding the federal investigation on the O’Neill & Borges law firm, which has been offering legal advisory services to the Board since last November. The law firm is being investigated by the U.S. Securities and Exchange Commission (SEC) for possible violations in the general obligations bond issue from 2014.

‘The Board will issue no comments,’ the Fiscal Control Board spokesperson, Edward Zayas, told NotiCel. There was no information either as to whether the Fiscal Control Board will uphold the generous contract awarded to the law firm after it was confirmed it was the object of a federal investigation.

As NotiCel had anticipated, the Securities and Exchange Commission (SEC) has been investigating several bond issues from the government of Puerto Rico since last year. Recently, the SEC officially notified the government, investment banks, and financial and legal advisors that they are being investigated for possible irregularities in bond sales.

The federal investigation hinges on the presumption that the government and private sector representatives attempted to swindle investors by offering false information or omitting essential information to make a better decision regarding said bond issues.

The law firms O’Neill & Borges and Pietrantoni, Méndez <><><><><><><><><><><> Álvarez (PMA) are in the list of legal advisors who were officially notified by the federal regulator through what is known as a ‘Wells notice’. Investment banks Morgan Stanley, Royal Bank of Canada, and Barclays also received a ‘Wells notice’ for their participation in the transactions./p

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This notice is a letter where the SEC informs an individual, company, or entity that they are being investigated by the federal commission, and that adverse actions are being considered./p

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High-ranking officials from Alejandro García Padilla’s administration had been summoned to testify before the federal authorities, regarding alleged irregularities in their fiscal and economic projections to achieve the $3.5-billion bond issue made in 2014. Officials from Luis Fortuño’s administration were also summoned./p

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The SEC has requested information from at least three bond issues carried out during the last two government administrations. It has been revealed that high-ranking officials from both administrations have been summoned, as well as private sector representatives./p

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As part of the investigation, federal agents have issued court orders to request documents and information from the Department of Hacienda (Treasury), the Government Development Bank, and the Puerto Rico Electric Power Authority./p

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The Fiscal Control Board has also hired former Hacienda Undersecretary Jayson O. Padilla Morales, who was in charge of working with the Puerto Rican government’s financial reports. The former official is tasked with analyzing public revenues and expenses, to the tune of $12,500 a month./p