Petaquilla Minerals Ltd. (fka PTQMF)

[JustForFun7]

Background to Financial Pacific Scandal

The conditions to develop the mining sector in Panama were created in 2009, when President, Ricardo Martinelli took office says a news story now circling the world via social networks and news outlets.


With only five months in office, the signal was given to Petaquilla Gold to starting to market its products said La Prensa in one of three stories on the latest alleged corruption scandal and published December 26.

The decision was made after having negotiated the "better benefits" for the Panamanian government, said Roberto Henriquez, at that time head of Trade and Industry and now Minister in the Presidency.

Two years later, amid a financial scandal in Financial Pacific stories come to light relating to the mining business and the executive.

Mayte Pellegrini is the prime suspect in an illegal transfer of money on a complaint lodged by the directors of Financial Pacific. She revealed to the prosecutor alleged links between high government officials, and investments of the brokerage firm and the shares of Petaquilla Minerals (holding Petaquilla Gold).

Pellegrini is in custody by order of the Attorney of the Thirteenth Circuit. In an investigation on November 22 she said managers of Financial Pacific and West Clare Ivan Valdes had said publicly that a secret account called High Spirit was opened to "manipulate the stock market with shares of Petaquilla". And it was the president, Ricardo Martinelli. "

Industry executives, faithful believers of anonymity to give confidence to customers, are shy and fearful of the consequences of the case Financial Pacific. They warn that what began as an isolated fraud could pose an imminent threat to market stability asthe alleged facts become known .

The performance of the shares of Petaquilla Minerals is tied to supply and demand for the products of the company, investment policies in the countries where it operates, to its administrative and economic and political environment, as any other company to market conditions.

If someone manages to get insider information and uses to his advantage to make investments, you can expect your money grow over the rest making their moves blindfolded.
And when there are imminent risks that would drop the price of these shares, you can get rid of them and emerge unscathed, while the other investors would lose their money.

Petaquilla share movement

In the hypothetical case that one official has acquired Petaquilla shares knowing that the decisions made by the State would impact the stock price, and could have taken advantage. Let's see why.
Just before the started Petaquilla gold mine started in 2010, the purchase and sale of shares of in Petaquilla Minerals increased.
This unusual movement is observed from the October 26, 2009. To this date the action of Petaquilla Minerals achieved a total traded volume of 2,805,000 was quoted at $ 0.22.

On November 13, 2009 there was another great move reflected in the Toronto Stock Exchange, … a total volume of 5,723,000 thousand shares of Petaquilla Minerals, at $0.25 each.

By the end of December 2009 the action was at $0.80, when the government had already negotiated a new relationship with Petaquilla Gold, to authorize the marketing of their products.
On January 4, 2010 the shares rose to $0.88, the same month that Petaquilla Gold got the backing of the state to export gold.
If an insider has acquired a package is of 100,000 shares at the end of October 2009, for $0.22, each by early 2010 the investment would more than triple..

When the Martinelli administration sanctioned the mining law on 11 February 2011, the sahres was trading at $1.14 or 1.22 Canadian.. Anyone who invested in late 2009 kept winning.

Protests intensified from environmentalists, trade unionists and the opposition, especially the indigenous Ngäbe Bugle, in whose territories major deposits of copper and gold are located
Despite the clashes, which ended with closed streets, injuries and arrests, the Government maintained its position to implement the newly adopted mining code.

With this scenario in favor of mining, on February 15 just five days after the law was enacted, the shares went to $1.20 or 1.27 Canadian, its highest ever.
Those who bought at $0.22 and had succeeded in upgrading their investments by nearly 600%.

The President held the position to not roll back its decision, regardless of the strong criticism and pressures inside the country.

An interesting fact is that on February 23, 2011, when mining code reforms were at a standstill, a volume of 2,216000 shares werw nwgotited at $1.13 each.

On March 3, 2011, President Martinelli pledged to repeal the law that reformed the mining code and on March 7, 2011 the shares that had reached $1.20 collapsed to $0.95.
Roberto Brenes, manager of the Panama Stock Exchange, believes that Pellegrini's claims should initiate an investigation by market regulators in Canada, where shares in Petaquilla Minerals are traded.
In Ontario they can determine whether movements in the purchase and sale of shares took place from Panama and who ultimately handled accounts on behalf of third parties.

"It's awful what is happening," said Brenes.
Ivan Clare, vice president of Financial Pacific, denies the charges of Pellegrini.

On Monday December 17, at 11:30 am, Clare presented his version of fraud in the brokerage to La Prensa
The meeting asked questions, from document to which the newspaper had access about what Pellegrini revealed in the investigative process “Visibly affected Clare said answer he would answer the questions via email.

The questions were:
According to the inquiry rendered by Mayte Pellegrini, the Pacific Financial brokerage had senior government officials as clients. Is the president, Ricardo Martinelli one these clients?
Since when has the president been your client?
Did the brokerage purchase the shares of Petaquilla?
Are the investments of these officials, including the President, also included the sale of shares of Petaquilla?
Who and for what, used the account called High Spirit?
Clare’a reaponse was brief. He replied that "Article 65 [of confidentiality stock] Act 67 of 2011 of securities expressly prohibits answering the questions and revealing customer names, without an express order of a court or regulatory authority, so these questions must be submitted to the regulator."

In the presidential campaign, Ricardo Martinelli in February 11, 2009 commented on how his administration would act on the environment in if he won the election. Page 32 of his government plan said that the main causes of deforestation was open pit metal mining.

In his regular media appearances, Martinelli also promised an audit of all grants, including Petaquilla Gold. To reporters of La Prensa, when still a candidate, he spoke against the environmental practices of Petaquilla. He even said that he would seek sanctions against the company owners. However, as noted by environmentalist Alida Spadafora, these measures were not practiced on December 11, 2009.

In March 25, 2010 the President stated that he was willing to amend the Code of Mineral Resources to facilitate foreign investment. He said the country could not miss a great opportunity and be left behind in mining due to lack of legislation.
During an official visit to Peru on August 27, 2010, the President said the environmental lobby in the world ignores the benefits of responsible mining in the development of a country.

On October 4, 2012, Martinelli announced the creation of a Ministry of Energy and Mines, the importance of these economic activities will have on the country. In 2015 Panama will be "a mining country," he said.

Legal Escape Routes

Carlos Barsallo, ex Securities Commissioner said Panamanian laws only apply when the misuse of inside information or insider trading in securities has been registered with the Panamanian regulator.

Petaquilla Minerals shares are not registered in Panama, which means that even investigation could be prohibited. or.
In criminal law, which is investigating and pursuing the prosecution, the crime of manipulation of information (Art. 251 of the Penal Code) indicates required as in administrative matters, that the value is registered in the regulator.

Panamanian criminal law is applicable even if committed outside the offenses listed in Article 19 of the Penal Code, which does not include financial crimes such as insider trading that is in the title of economic order offenses.

The issue, in any case, could be of paramount concern and competence of administrative authorities and criminal market where the violation occurs, specifically the province of Ontario,Canada where Petaqilla Minerals are traded on the TSX or Toronto Stock Exchange. .

The authorities should,watch the news in Panama, to begin their research and seek assistance from Panama, said Barsallo.

Assistance must be requested through the executive authorities via the Public Ministry today and Ana Belfon, appointed Attorney General by President Martinelli.

http://www.newsroompanama.com/business/5096-background-to-financial-pacific-scandal.html