OPERS | Pension360

Ohio Pension Looking to Lead Suit Against Brazilian Oil Company

The Ohio Public Employee Retirement System has asked to be a lead plaintiff in a class-action lawsuit against Brazilian oil company Petroleo Brasileiro SA.

The pension fund is a shareholder of the company, and says it lost money – $50 million – when Petroleo stock declined after fraud allegations came to light.

More from Cleveland.com:

The Ohio Public Employee Retirement System, or OPERS, is one of three state pension funds that asked a federal court on Friday to head up the federal lawsuit against Petroleo Brasileiro SA, according to Attorney General Mike DeWine’s office.

The semi-public company, known as Petrobras, has been accused of inflating construction costs in exchange for kickbacks, DeWine’s office said in a news release.

OPERS and other shareholders saw their Petrobras stock value plummet after Brazilian prosecutors announced the corruption allegations, according to the release.

Being named as a lead plaintiff in the lawsuit would give OPERS more control over the direction of the case, said DeWine spokesman Dan Tierney.

Besides OPERS, pension funds in Hawaii and Idaho would also be named lead plaintiffs, according to a motion filed in U.S. District Court in New York City, the attorney general’s office said.

Petroleo Brasileiro SA stock has fallen from $20 in September to $6.50 at the beginning of February.

Photo by ezioman via Flickr CC License

Ohio Pensions Seek to Lead Lawsuit Against Firm Accused of Fraud

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

Oklahoma PERS Hires Executive Director

The Oklahoma Public Employees Retirement System has tabbed a new executive director: Joseph Fox, who was the fund’s general counsel since 2005 and who had been serving as interim executive director since September.

From an OPERS release:

The board of trustees of the Oklahoma Public Employees Retirement System (OPERS) has selected Joseph A. Fox as its new executive director effective November 1, 2014. The board had previously named Fox as its interim executive director. Mr. Fox fills the vacancy created by the resignation of Tom Spencer who is becoming the executive director of the Oklahoma Teachers’ Retirement System.

“The OPERS Board is very happy with its selection of Joe as executive director,” said OPERS Board Chair DeWayne McAnally. “The search committee met and discussed the possibilities at length, and after many consultations with outside sources and OPERS staff, Joe became the clear choice.”

[…]

McAnally added, “This is a critical time for OPERS as it is focusing on implementing a new defined contribution retirement plan in 2015. The agency needs strong and enduring leadership, and the board feels Joe provides that continuity.”

OPERS oversees $8.5 billion in assets for 81,000 members.