Tag: failed investments

U.S. Supreme Court Won’t Hear New Orleans Pension Case

U.S. Supreme Court

New Orleans has failed to pay $17.5 million in required pension contributions to the city’s firefighters’ pension fund since 2010. A state court last year ruled that the city had to repay the fund in full, and an appeals court affirmed the ruling.

But New Orleans tried to appeal the case to the U.S. Supreme Court – the city argued that it shouldn’t have had to shoulder the cost of the pension fund’s failed investments, which led to a decreased funding ratio and required higher payments from the city.

But today, the U.S. Supreme Court said it wouldn’t hear the case. From NOLA.com:

The U.S. Supreme Court has decided to stay out of the ongoing legal feud between the Mayor Mitch Landrieu and the New Orleans firefighters’ pension board, leaving the city to cover disputed payments to the firefighters’ collective retirement account over the past four years.

The high court refused on Monday to hear an appeal from Landrieu arguing that state Judge Robin Giarrusso overstepped her authority when in March 2013 she ordered City Hall to immediately pay $17.5 million to the firefighters’ pension fund for shortfalls in 2012. Her ruling was upheld by the state’s 4th Circuit Court of Appeal in December.

The Supreme Court’s decision likely will have little bearing on the case, considering that Landrieu and the pension board have begun work on a compromise. On Friday, the two sides agreed to refinance the city’s debts to the fund, a shift that would considerably lower the city’s monthly payments should Giarrusso agree to it. That $17.5 million bill, for instance, would be lowered to $9.2 million under the proposed arrangement.

The two sides go back to District court on October 21.

 

Photo by  Mark Fischer via Flickr CC License

Pension Funds Lead “Enormous” New Class Action Lawsuit Against JP Morgan

skyscraper facade

It’s been less than a year since JP Morgan agreed to a $13 billion settlement to compensate homeowners and pension funds for losses stemming from failed investments.

Now, the bank has been told it will face another class action lawsuit centering on the same issue: the toxic mortgage-backed securities it sold investors in the years leading up to the financial crisis.

At the forefront of the lawsuit are two pension funds: the Laborers Pension Trust Fund for Northern California and Construction Laborers Pension Trust for Southern California, who are both lead plaintiffs.

More from Business Insider:

A federal judge on Tuesday said JPMorgan Chase & Co. must face a class action lawsuit by investors who claimed the largest U.S. bank misled them about the safety of $10 billion of mortgage-backed securities it sold before the financial crisis.

U.S. District Judge Paul Oetken in Manhattan certified a class action as to JPMorgan’s liability but not as to damages, saying it was unclear how investors could value the certificates they bought, given how the market was “not particularly liquid.” He said the plaintiffs could try again to certify a class on damages.

Oetken ruled 10 months after JPMorgan reached a $13 billion settlement to resolve U.S. and state probes into the New York-based bank’s sale of mortgage securities.

The class consists of investors before March 23, 2009 in certificates issued from nine of 11 trusts created by JPMorgan for the April 2007 offering. The other two trusts attracted only a handful of investors, and are the subject of other lawsuits.

Oetken named the Laborers Pension Trust Fund for Northern California and Construction Laborers Pension Trust for Southern California as lead plaintiffs, and their law firm Robbins Geller Rudman & Dowd as lead counsel.

Another bank, Morgan Stanley, said this summer it expects to be sued by CalPERS. The pension fund lost almost $200 million during the financial crisis on real estate investments it bought from the bank.

 

Photo by Sarath Kuchi via Flickr CC License