A group of top executives and board members of a Chilean investment firm embroiled in a fraud case have been accused by the country’s market regulator of delivering false information to the market.
Aurus Capital has been in the spotlight since October 2016, when it was uncovered in a routine audit of its products that former fund manager Mauricio Peña Merino hid $35 million in losses. Peña has since been sentenced to five years’ probation after being found guilty in court.
The regulator has now put a notice against a group of executives and managers serving from 2013 to 2016 accusing them of several infractions. While the regulator has not explicitly said it’s in connection to Pena's activity, the timeline of the charges overlap with the fraud case.
The first charge relates to 'negligence' in the exercise of their functions, which 'manifested in deficiencies of internal control and risk management, as well as the wrong valuation, accounting, custody and registration of investments of funds managed by Aurus,' according to a statement from the regulator Wednesday disclosing the charges.
Aurus’ managers were also accused of delivering false information to the market, ‘especially in the certifications sent about risk management systems and internal control of the asset manager.’
The regulator didn’t disclose the name of the managers, who have not been found guilty in connection with the case.
In May, the firm named Raimundo Cerda Lecaros as chief executive following after Juan Carlos Délano Valenzuela resigned. The change was due to Aurus' new business focus, a spokesperson for the firm said at the time.
Aurus, which used to operate and asset manager and run public funds, withdrew from those activities as a result of the case. It now focuses on venture capital.
The firm has accused an affiliate of the Compass Group that used to provide back office services of facilitating the fraud, demanding $35 million in an arbitration case. Compass has denied any responsibility.
Aurus representatives weren’t available by phone, and emails to three Aurus executives seeking comment weren’t returned in time for publication.