Pittsburgh Mayor Asks Pension to Divest Guns, Fossil Fuels, Private Prisons

Pittsburgh Mayor Bill Peduto is asking the board of the city’s Comprehensive Municipal Pension Trust, of which he is a member, to develop and execute a strategy to divest from fossil fuel firms, firearm and ammunition companies, and for-profit prisons.

In a letter to the board, Peduto cited Pittsburgh’s history of “exercising both moral and financial authority” as precedence for divesting from controversial companies.

“In the past, the city has divested from socially irresponsible companies including those associated with apartheid in South Africa, companies that use child labor, and removing our monetary assets from financial institutions that demonstrate irresponsible community lending practices,” Peduto wrote in the letter. “The city’s leadership as a socially responsible investor has helped to advance just causes and helped to lead formative social change. A similar time is upon us to act and provide leadership.”

Peduto said that Pittsburgh and its residents are being negatively impacted by climate change, acts of gun violence, and an incarceration system that is enabling systemic inequality. “These are areas that our financial means should not perpetuate,” he added. He is seeking divestment recommendations from the board by the end of the year.

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In October 2018, the city was shaken by a mass shooting at a local synagogue that killed 11 people. In April, Peduto, flanked by family members and friends of those killed in the shooting, signed new firearms regulations that banned assault weapons, and the use of certain ammunition and modified guns. The legislation also implemented so-called “extreme risk protection orders” that allows the courts to temporarily take firearms away from those shown to be a danger to themselves or others.

“If Washington and Harrisburg refuse to recognize this is a public health emergency, and refuse to stand up to gun manufacturers, then we must take action to challenge laws and protect our people,” Peduto said when signing the legislation.

The Comprehensive Municipal Pension Trust Fund is comprised of the Municipal Pension Fund, the Firemen’s Relief and Pension Fund, and the Policemen’s Relief and Pension Fund. As of the end of March, the fund had a total market value of $758.9 million, and its total invested portfolio had a market value of approximately $463.2 million.

Any divestment of fossil fuels, firearms, and private prisons, however, may be more of symbolic gesture as the fund’s investments in those sectors “are not really high to begin with,” Adam Hoffman, the internal auditor for the pension fund with the city’s Finance Department, told the Pittsburgh Gazette, though he did not provide specific figures.

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Tags: Bill Peduto, Fossil Fuels, Pension, Pittsburgh, Pittsburgh Comprehensive Municipal Pension Trust

The SEC has charged a recent college graduate with running a Ponzi scheme from a college fraternity house that targeted college students and young investors.

The SEC’s complaint alleges that 22-year-old Syed Arham Arbab orchestrated the fraud from a fraternity house near the University of Georgia campus in Athens.

Arbab allegedly offered investments in a purported hedge fund called “Artis Proficio Capital,” which he claimed had generated returns ranging from 22% to 56% in one year. Although the name of the fraternity wasn’t mentioned, the address listed for the fund is the same address of the university’s chapter of Phi Kappa Tau fraternity.

Arbab also allegedly sold so-called “bond agreements,” which promised investors the return of their money, plus a fixed rate of return. The SEC’s complaint alleges that no fewer than eight college students, recent graduates, or their family members invested at least $269,000 in the investments.

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According to the complaint Arbab began soliciting investors in May 2018 for investments in the fund, which he told investors he managed and controlled. The SEC alleges that Arbab targeted individuals associated with the university and earlier friends and associates. In text messages and emails to investors and potential investors, he made multiple representations about the fund, including that money invested in the fund was “guaranteed and backed up to $15,000.”

However, no hedge fund existed, according to the SEC, which said the returns Arbab claimed were “fictitious” as he never invested the funds as represented. Instead, as money was raised, Arbab allegedly placed a large portion of investor funds in his personal bank and brokerage accounts, which he used for various living expenses. These expenses allegedly included more than $10,000 in cash withdrawals, and more than $5,000 in hotel and nightclub expenses during a December 2018 gambling trip to Las Vegas with friends.

The SEC said Arbab tricked investors into unwittingly sending Ponzi payments directly to other investors. He allegedly did this by telling investors to send money via smartphone applications such as Zelle, Venmo, or Cash App to a recipient Arbab would falsely describe as one of the fund’s partners, when the recipients were in fact earlier investors looking to withdraw their assets.

The complaint further alleges that in his personal brokerage account Arbab engaged in unprofitable options trading, losing more than $300,000 between September 2018 and March 26, 2019, and that when the account was closed it only had a balance of approximately $350.

“We allege that Mr. Arbab used his college affiliations to operate a Ponzi scheme that drained valuable resources from current and former students,” Richard Best, regional director of the SEC’s Atlanta Office, said in a release. “This is a reminder that investors of all ages and experience levels—whether long-time investors or recent graduates investing funds from their first few paychecks—should carefully research investment opportunities and the people offering them.”

The SEC’s complaint, which was filed in federal district court in Athens, Georgia, charges Arbab, Artis Proficio Capital Investments LLC, and Artis Proficio Capital Management LLC, with violating the antifraud provisions of the federal securities laws. In addition to an order freezing certain assets of Arbab and his entities, as well as a temporary restraining order, the SEC is seeking preliminary and permanent injunctive relief, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.

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Tags: Arham Arbab, Artis Proficio Capital, Hedge Fund, Phi Kappa Tau, Ponzi Scheme, SEC, University of Georgia