Tag: lawsuit

Judge in Illinois Pension Lawsuit Rejects Request For More Time

Illinois flagLawyers representing groups challenging Illinois’ pension reform law asked for more time to file arguments this week. The request would have extended the deadline by a month.

The judge presiding over the case rejected that request on Thursday.

From the Associated Press:

The Illinois Supreme Court has rejected a request for an extra month to file arguments by lawyers contesting the law that overhauls a state pension program that is $111 billion in debt.

Attorneys for state employees, retired teachers and others who contest the constitutionality of the law said they needed until March 16.

But the court denied the motion Thursday because it had already agreed to fast track the appeal of a lower court’s ruling. The case is scheduled to be heard in March.

The judge also rejected a request from outside groups who wanted to file additional briefs. From Pantagraph:

A lawsuit seeking to overturn changes to the state’s employee pension systems remains on a fast track.

In a decision issued Thursday, the Illinois Supreme Court denied a request from outside groups and individuals to file briefs in the case, saying the additional filings could put the court’s plan to hear the case during its March term in jeopardy.

Attorneys representing state retirees and employees who would be affected by the Legislature’s controversial 2013 pension overhaul supported the court’s decision.

Ohio Pensions Seek to Lead Lawsuit Against Firm Accused of Fraud

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The State Teachers Retirement System of Ohio (STRS) and the Ohio Public Employees Retirement System (OPERS) are looking to be lead plaintiffs in a lawsuit against an investment firm that allegedly misled investors about its performance and financial state.

The alleged fraud led to investment losses of $7.5 million for the two pension funds, as well as billions in losses for other investors.

From the Pike County Daily:

Following a recent review of securities and accounting fraud allegations, Ohio Attorney General Mike DeWine announced that he has filed a motion for two of Ohio’s pension funds to lead a class of investors in a lawsuit against American Realty Capital Properties (ARCP), Inc.

The news comes after the company, a real estate investment trust based in New York City, disclosed that ARCP officials intentionally misstated company financials and subsequently covered up the accounting irregularities, resulting in approximately $3 billion in losses for the company’s shareholders, including State Teachers Retirement System of Ohio (STRS) and the Ohio Public Employees Retirement System (OPERS).

“The information American Realty Capital Properties provided pension fund managers was false, misleading, and purposefully hid accounting fraud,” said Attorney General DeWine. “This fraud inflated the true value of the company, causing Ohio teachers and public employees to lose millions of hard-earned retirement dollars.”

The motion alleges that ARCP issued materially false and misleading financial statements by, among other things, overstating reported adjusted funds from operations and then intentionally covering up their impropriety. In addition, it alleges that ARCP improperly accounted for various accruals and expenses that materially affected the company’s reported earnings per share. As a result of ARCP’s improper accounting and cover-up, key performance metrics were overstated and reported net losses for the reporting periods ending June 30, 2014 were understated. Revelation of this alleged accounting fraud by ARCP on October 28, 2014 resulted in losses in the company’s stock value of approximately $3 billion. STRS and OPERS lost in excess of $7.5 million as a result of the alleged fraud.

There are several lawsuits against the firm stemming from the fraud allegations. The motion filed by the Ohio Attorney General would consolidate those lawsuits and name the Ohio pension funds as lead plaintiffs.

 

Photo by Joe Gratz via Flickr CC License

Judge: Closed-Door Pension Meeting Violated Florida Sunshine Laws

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An appeals court ruled today that pension and union officials violated Florida’s Sunshine Law when they held benefit negotiation sessions behind closed doors.

More from News4Jax.com:

The 1st District Court of Appeal upheld a decision by Circuit Judge Waddell Wallace in a lawsuit filed last year by Florida Times-Union Editor Frank Denton.

The case stemmed from mediation sessions that were held after Randall Wyse, chief negotiator for the Jacksonville Association of Firefighters Local 122, and other plaintiffs filed a lawsuit in federal court against the city and the Jacksonville Police and Fire Pension Fund Board of Trustees, according to Tuesday’s ruling. The mediation sessions led to a tentative agreement about changes in the pension system.

Denton filed a lawsuit contending that the mediation sessions amounted to collective-bargaining meetings that violated the Sunshine Law, which requires such meetings to be open to the public.

Wallace sided with Denton, and a three-judge panel of the appeals court agreed Tuesday.

“We cannot condone hiding behind federal mediation, whether intentionally or unintentionally, in an effort to thwart the requirements of the Sunshine Law,’‘ said the ruling, written by appeals-court Judge Clay Roberts and joined by judges Simone Marstiller and Ronald Swanson. “Caution should be taken to comply with the Sunshine Law, and compliance should be the default rather than the exception. … By holding closed-door negotiations that resulted in changes to public employee’s pension benefits, the appellants (the city and pension fund board of trustees) ignored an important party who also had the right to be in the room — the public.”

The city still has not resolved the pension matter, and a marathon meeting is planned for Wednesday. The mayor is expected to address the issue.

The city is reviewing the recent ruling. There’s no word if it plans to appeal it to the state Supreme Court.

The Jacksonville Police and Fire Pension Fund managed $1.4 billion of assets as of September 2014.

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

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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

Alaska Fund Sues 13 Banks Over Rate Manipulation

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The Alaska Electrical Pension Fund filed lawsuits yesterday against 13 banks across the world for alleged rate manipulation. The banks include Bank of America, Citigroup and Goldman Sachs. More from Chief Investment Officer:

The Alaskan fund filed a complaint to the Manhattan Federal Court on Thursday, claiming the banks ran a “secret conspiracy” to set the ISDAfix rate at artificial levels from 2009 to 2012, Bloomberg reported. This action caused billions of dollars of investor losses, the fund claimed.

The ISDAfix is used to set rates for interest rate derivatives and other financial instruments.

The pension fund accused the banks of executing rapid trades just before the rate was set, an action referred to as “banging the close”. This caused brokerage firm ICAP, which was also cited in the filing, to delay processing trades until the banks moved the rate where they wanted, meaning it did not necessarily reflect market activity.

All of the defendants either declined to comment or did not respond to Bloomberg’s calls, the newswire said.

From the fund’s court filing:

“This could not have happened without some form of advanced coordination…even if reporting banks always responded similarly to market conditions, the odds against contributors unilaterally submitting the exact same quotes down to the thousandth of a basis point are astronomical. Yet, this happened almost every single day between at least 2009 and December 2012.”