Ohio Pension Looking to Lead Suit Against Brazilian Oil Company

oil barrels

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.


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Massachusetts Pensions Reach $170 Million Settlement In Lawsuit Against Fannie Mae

flying one hundred dollar bills Two Massachusetts pension funds have been leading a class action lawsuit against Fannie Mae, accusing the firm of securities fraud that caused shareholders to lose money.

On Monday the pension funds, the Pension Reserves Investment Trust and the Boston Retirement Board, said they had reached a $170 million settlement with Fannie Mae.

From the Boston Globe:

The Massachusetts state pension fund announced Monday a proposed $170 million settlement in a class-action lawsuit brought in 2008 against the Federal National Mortgage Association, known as Fannie Mae.

The state fund, called the Pension Reserves Investment Trust, was co-lead plaintiff in the lawsuit, with the Boston Retirement Board. It’s not yet clear how much the state and Boston funds will receive from the proposed settlement, which includes thousands of stockholders.

“We are proud to have helped negotiate a meaningful recovery for Fannie Mae investors by stepping forward in this case,” Michael Trotsky, executive director of the $60.7 billion state fund, said in a statement. “Pursuing meritorious litigation where we believe we can add value” is part of the fund’s overall strategy, he said.


The lawsuit was filed in federal court in the Southern District of New York and alleged that shareholders lost money due to securities fraud by Fannie Mae and two of its former officers between Nov. 8, 2006, and Sept. 5, 2008.

Specifically, the lawsuit alleged that the defendants made false and misleading statements concerning the company’s internal controls and its exposure to subprime and other risky mortgage loan products.

A separate lawsuit brought previously by other plaintiffs against Freddie Mac had failed.

The proposed settlement must be approved by the court. If approved, a court-appointed administrator would oversee the claims and the divvying up of the recovered money.

The Boston Retirement Board manages $4 billion in assets. The Pension Reserves Investment Trust manages $53 billion in assets.


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Berkshire Hathaway Sued By Subsidiary Over Retirement Benefit Cuts

Warren Buffett

Workers at Acme Brick Co. say Berkshire Hathaway promised not to scale back retirement benefits when it bought the company in 2000.

Since then, Acme Brick employees have had their pensions frozen and been subjected to other rollbacks in retirement benefits. So they have sued Hathaway, the holding company run by Warren Buffett, for breaching its alleged promise. Reported by the Star Telegram:

Two employees and a retiree of Fort Worth-based Acme Brick Co., including the company’s chief financial officer, have sued the company and its parent, Berkshire Hathaway, alleging the company improperly reduced the company match on its 401(k) retirement plans and froze its pension plan.

The class action suit, filed Aug. 15 in U.S. District Court in Fort Worth, says Berkshire Hathaway, run by multi-billionaire Warren Buffett, broke a pledge it made when it acquired Acme with Justin Industries in 2000 not to reduce benefits in the company’s retirement plans.

“Since that time, the employees have stuck with the company through good times and bad, in anticipation that their benefits under the Retirement Plans would ultimately compensate them fairly,” the lawsuit says. “Now, almost 14 years later, Berkshire Hathaway has broken its promise.”

Acme Brick’s senior management on July 15 voted to make changes to the retirement plans urged by Buffett, Berkshire’s chief executive officer, and Marc Hamburg, its chief financial officer. Otherwise “Berkshire Hathaway intended to divest itself of Acme as a subsidiary,” the lawsuit says.

The class-action lawsuit alleges that Berkshire Hathaway violated the Employee Retirement Income Security Act (ERISA) when it cut benefits.

Read more on the case here.

Judgement Due in Court Battle Waged By Workers Excluded From Pension System Because of Medical Issues


A five-year long court fight continues to play out in Jacksonville, and chances are good this lawsuit will continue to stretch on even after an initial judgement is filed.

City employees filed the class-action lawsuit after Jacksonville barred many workers with medical issues from entering the pension system. The workers say the city violated the Americans with Disabilities Act. From the Florida Times-Union:

The suit involves about 1,400 employees, and at one point their lawyers said the case might affect up to $500 million of pension payments, spread over 30 years. But there are too many details unanswered still for either side to talk about a price tag yet.

The employees bringing the suit argue the city violated ADA rules by requiring new workers to be screened for health problems such as diabetes and heart disease before they could enroll in the city’s pension system. People with medical issues could be blocked from enrolling in the pension and would instead pay into Social Security, or they could sign a waiver that disqualified them from getting any death or disability benefits based on their particular issue.

“The sole purpose of the examination was to address the terms under which an employee would be admitted to the pension plans, if admitted at all,” reads the judgment drafted by the plaintiffs.

The city changed its rules in 2010 to allow employees to buy pension coverage they couldn’t get earlier, but the suit is about what expenses the city should cover.

The city has argued that it has no liability in the case; if the judge rules on the side of the city, the case will wind down quickly.

But if the ruling falls on the side of employees, more court battles loom. Among them: how much does the city owe? Once that number is determined, the court will need to decide how to divvy up the damages amongst the employees.