Nation's Largest Pension Fund Sues Lehman For Fraud
The Los Angeles Times reported that the nation’s largest pension fund, California Public Employees’ Retirement System (CalPERS), has filed suit against Lehman Brothers Holdings, Inc. for fraud and making materially false statements about losses from mortgage backed securities (MBS) during the financial crisis of 2007 and 2008. Others named in the suit were Citigroup, Wells Fargo, Mellon Financial and Richard Fuld, Jr., the Chief Executive Officer of Lehman. CalPERS has also filed suit against the three largest rating firms, Moody’s, Standard & Poors and Fitch, Inc. for giving high ratings to bonds that suffered massive losses in the financial meltdown of subprime mortgage backed securities.
Although the lawsuit did not specify the amount of damages sought, CalPERS owned 3.9 million shares of Lehman stock and roughly $700 million worth of Lehman bonds at the time that Lehman filed for bankruptcy in September 2008, the largest in U.S. history.
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