The latest news is that the Chief Superintendent of the Panama Stock Exchange (SMV), Alejandro Abood, could recuse himself in the stock market scandal of the brokerage firm Financial Pacific (FP), suspended for embezzling 14 million dollars. FP has filed a lawsuit against Abood for his decision to reorganize the company and then suspend it until the close of the findings or a resolution from the Supreme Court, which theoretically impedes him.

According to superintendent Abood, the decision to recuse will be taken this week and he is considering whether it would be partial or complete, commenting "I do not know if it is necessary or warranted, otherwise all criminals would indite a judge to get away from him, if that was the case."

Meanwhile, Vernon Ramos, deputy director of Financial Analysis of the Audit Department of the SMV, who audited Financial Pacific as well as two securities firms and found numerous anomalies, has been missing for the last two months.

The importance of this case for the credibility of the Panamanian finance system was revealed in a press release issued by the Panama Stock Exchange and the Central Latinoamericana de Valores and endorsed by the Chamber of Commerce, Industries and Agriculture of Panama which states that, “The Panama Stock Exchange (BVP) and Central Securities Latinoamericana (Latin Clear) deplore the chain of events and intrusions and omissions concerning the firm Financial Pacific Exchange, Inc. (Financial) and the serious implications this has on the functioning and reputation of our financial system”.

Source: Prensa.com

More on this topic

Financial Pacific and the Superintendency of Securities in Panama

May 2013

A court ruling states that the complaint filed against the financial company was untimely, considering that the SMV learned about the facts deemed irregular from information that was received, and not when it was analyzed.

From a statement by the Superintendency of Securities (VPS):

Panama: Suspension Lifted on Financial Pacific

May 2013

Following approval of the sale of the shares to Brazilian group Mendo Sampaio and the withdrawal of the complaint against the Superientendente of Securities, Financial Pacific has been authorized to resume operations.

A statement from the Superintendency of Securities (VPS) reads:

Panama Authorizes Sale of Financial Pacific

May 2013

At the same time as the Superintendency of the Stock Market approved the sale, the financial company formally withdrew its complaint against the Superintendent Alejandro Alfaro Abood.

Added to the problems faced by Financial Pacific (FP) is the embezzlement of $12 million.

Financial Pacific Sells Shares

November 2012

The Panamanian Financial company, which has had its activities suspended, is trying to get partners to inject capital, in order to address the identified shortfall of $11.5 million.

Panama's Supreme Court, in a decision challenged by financial market analysts, put the breaks on a reorganization of Financial Pacific, which had already been put into progress after being ordered by the Superintendency of Securities (VPS), leading the directors of the lender to seek the essential composition of capital, after what was reported as a criminal act by one of its officials.