Jul
20

Hedge Funds Sue Puerto Rico’s Governor, Claiming Money Grab

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Gov. Alejandro García Padilla of Puerto Rico, left, and Treasury Secretary Jacob J. Lew in San Juan in May.CreditCarlos Giusti/Associated Press

A group of hedge funds sued the governor of Puerto Rico on Wednesday, saying he had started violating the island’s hard-won new debt-restructuring law before the ink from President Obama’s pen was even dry.

The law, which the president signed on June 30, puts Puerto Rico under the watch of a federal oversight board to police its spending and promote fiscal reform. But the law has a built-in lag of at least two months before the federal board will be in place.

In the meantime, the hedge funds said Gov. Alejandro García Padilla was exploiting the lag by grabbing hundreds of millions of public dollars and spending them on “purposes that apparently enjoy political favor.”…

Hedge Funds Sue Puerto Rico’s Governor, Claiming Money Grab

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