Virginia Attorney General Mark R. Herring recently filed a lawsuit against 13 banks seeking $1.15 billion in damages alleging the banks fraudulently misled the Virginia Retirement System (VRS) during a sale of residential mortgage-backed securities to the state retirement fund.
The lawsuit was unsealed this week in Richmond Circuit Court with Herring calling it a historic case against some of the largest commercial banks in the world.
Virginia lost approximately $383 million after it was forced to sell most of the securities, which were originally purchased in 2004 and sold before 2010. The securities were allegedly built on junk mortgages, according to the Attorney General's Office.
"It will take many more years to recover the economic strength and stability we lost, but I will not allow Virginians to be left holding the bag... ," Herring said.
Targeted banks include: Barclays Captial Inc., Citigroup Global Markets Inc., Countrywide Securities Corporation, Credit Suisse Securities, Deutsche Bank Securities Inc., Goldman, Sachs & Co., RBS Securities Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC; UBS Securities LLC; WAMU Capital Corp.; J.P. Morgan Securities LLC as current owner of Bear, Stearns & Co.; Merrill Lynch, and Pierce, Fenner & Smith Inc. as current owner of Banc of America Securities LLC.