Fidelity Investments Unit Faces ERISA Fiduciary Breach Claims Fidelity Management Trust Co. has been named a defendant in a class action securities case under ERISA law. The plaintiffs claim that the Fidelity Investments unit is in fiduciary breach under ERISA because it included a stable value fund as an investment…
Ex-Detroit Pension Trustee Gets 11 Years in Prison Jeffrey Beazley, a former treasurer of the city of Detroit, Michigan, has been sentenced to 11 years behind bars for getting kickbacks and bribes from businessmen who received hundreds of millions of dollars from two of the city’s pension systems. Beasley, a…
Goldman Sachs Group (GS) will pay $272 million to more than 400 bond investors, including two electrical pension funds, to settle a lawsuit alleging that it made misleading disclosures in order to sell mortgage securities backed by faulty loans. The lead plaintiff in the case was the NECA-IBEW Health and…
The SEC is accusing investment advisory firm Gray Financial, its co-CEO Robert C. Hubbard IV, and president/founder Laurence O. Gray with fraud. The regulator claims that the three of them of breached their duty to clients by directing certain pension funds to invest in a firm-offered alternative investment even while…
JPMorgan Ordered to Face $10B Mortgage-Backed Securities Case A federal judge said that JPMorgan Chase & Co. (JPM) must face a class action securities fraud lawsuit filed by investors accusing the bank of misleading them about the risks involved in $10B of mortgage-backed securities that they purchased from the firm…
Financial Guaranty Insurance Company is challenging the city of Detroit, Michigan’s efforts to invalidated $1.45 billion in borrowings that were supposed to resolve unfunded pension liabilities. Instead, they have been named as one of the reasons that the city went into Chapter 9 bankruptcy. The bond insurer is asking a…
In U.S. District Court for the Northern District of Illinois, Danish pension funds (and their investment manager) Unipension Fondsmaeglerselskab, MP Pension-Pensionskassen for Magistre & Psykologer, Arkitekternes Pensionskasse, and Pensionskassen for Jordbrugsakademikere & Dyrlaeger are suing 12 banks accusing them of conspiring to take charge of access and pricing in the…
Second Circuit Dismisses Securities Fraud Lawsuit Against Citigroup The U.S. Court of Appeals for the Second Circuit has affirmed the district court’s decision to throw out the securities fraud lawsuit filed by a real estate developer against Citigroup (C) and its former CEO Vikram Pandit. Sheldon H. Solow had accused…
The U.S. Court of Appeals for the Second Circuit has affirmed a lower court’s decision to not grant the petition of two pension funds asking to certify a class action of investors that allegedly suffered financial losses in mortgage-backed securities. The Second Circuit said that the Lower Court did not…
The California Public Employees’ Retirement System is suing Lehman Brothers Holdings Inc., its ex-executives, and a number of bond underwriters for fraud and of making materially false statements about mortgage-backed securities losses. CalPERS, a $229 billion public pension fund, owned about $700 million Lehman bonds and 3.9 million shares of…