New batch of players in Financial Pacific scandal

THE SUPREME COURT has been asked by the Securities Superintendent to investigate allegations of insider trading of shares of the Canadian mining company Petaquilla Minerals by the Financial Pacific brokerage.

The probe initially focused on an account linked to former President Ricardo Martinelli, which was allegedly used to buy shares of the company shortly before he approved the extraction of gold by Petaquilla Gold, one of its subsidiaries.
According to information originally published by TVN News, another investment account, whose executives were Juan Luis Correa, Ricardo and Luis Enrique Martinelli Linares, also bought shares of Petaquilla.
The Superintendency in its request to the Supreme Court says confidential information was used for economic advantage.
The organization was top secret. Only members and a tiny circle of power was aware of the moves. However, the group failed to anticipate that Financial Pacific would become embroiled in a $12 million fraud that prompted an inquiry that led to the discovery of the secret accounts says La Prensa.
The investigation opened a trunk full of secrets and financial conspiracies linked directly to the former president.
The authorities have determined that several accounts were used to buy and sell shares of Petaquilla, which were timed before crucial decisions about the company were made public.
The group included his sons, his brother-in-law, friends and partners.
The names of the accounts in question are: High Spirit Overseas, Distribuidora Comar, S.A., and Ricardo Martinelli. The last of which gave a pretty clear indication to investigators that the former president was involved.
Prosecutors have charged Aaron “Ronny” “Mizrachi, the brother-in-law of Martinelli, with money laundering in connection with his role as signatory of the High Spirit account. Shares of Petaquilla were purchased from the account with the name “Ricardo Martinelli” on Oct. 27, 2009. At the time, the shares were trading at 22 cents.
That price increased by three cents a share soon after Martinelli gave the green light for the company to start mining at its concession in Colón.
Accounts linked to Martinelli purchased another block of shares for 32 cents, then sold them three months later for 78 cents, realizing a profit of more than $100,000 on an investment of $71,000.
Two years later, according to the findings of the Superintendency, $50,000 from the “Martinelli” account was transferred to a law firm in Las Vegas. That firm is currently under investigation for financial crimes by the United States Securities Commission (SEC).
The account “Distribuidora Comar” has been characterized by investigators as a partnership between Juan Luis Correa and Martinelli.
Distribuidora Comar bought shares of Petaquilla, but they were done on a margin account and did not include any cash transactions. According to the superintendency, there were efforts made to hide the evidence of transactions involving the account from regulators.
Correa, in an interview Thursday April 3, validated the existence of the account, but said he lost money.
He compared the investment to gambling in a casino, and added that he did not know the details of the investments
In addition to the financial irregularities, the Superintendency has also made connections between the investors and directors of Petaquilla, validating their theory of insider trading.
It expressly mentions that Raúl Ferrer Arosemena was “designated” by Martinelli to serve on the board of directors of Petaquilla.
Just when Petaquilla Gold was laying the foundations for a new relationship with the government to allow its mining operation to start, the board of directors of Petaquilla Minerals changed radically. That’s when Arosemena was named to the board, in November 2009. That appointment came a month after Ferrer was named by the government to the Panama Pacifico board. He was director of Genesis and Associates, an advertising company that handled millions of dollars advertising accounts for state entities.
Another connection between the company and its secretive investors was the fact that Correa’s cousin, Rodrigo Esquivel, was president of Petaquilla.
This investigation, which began in 2014, was the second time Financial Pacific came under scrutiny, and regulators say that much more evidence may have been destroyed when their first investigation, which began in 2012, was blocked reports La Prensa.
At that time, the directors of Financial Pacific, Ivan Clare and West Valdés, successfully petitioned the Supreme Court to block attempts by the Sperintendency to investigate the firm. The judge who made that decision was Alejandro Moncada Luna, a Martinelli appointee who is currently serving a five-year sentence for fraud.