Mike Cox (R)
LANSING, Mich. (Legal Newsline) -- The state of Michigan has been appointed the lead plaintiff in a national securities class action lawsuit against the Bear Stearns Companies as well as five current and former executives and directors.
Bear Stearns Companies and the five employees allegedly failed to mark down its expansive portfolio of securities containing subprime mortgage-backed securities, thereby misleading pension funds and investors.
"Protecting pensions is a top priority for my office," Michigan Attorney General Mike Cox said. "We are fighting to ensure families are not cheated out of their pensions. I will do everything I can to ensure that Bear Stearns is held responsible for misleading investors."
The lawsuit claims that from December 14, 2006, through March 14, 2008, Bear Stearns broke federal securities laws in misleading investors about their subprime exposure, resulting in pension funds and other Michigan investors, as well as many nationwide, losing billions of dollars.
The State of Michigan Retirement Systems lost $62 million by being mislead, state officials say.
"We have an obligation to more than 574,000 participants and beneficiaries who are depending on State Pension Funds for their retirement," State Treasurer Robert Kleine said. "This sends a very clear message that we will take every step necessary to recover lost funds and ensure our pension funds do not fall victim to fraudulent activity."
Michigan, as lead plaintiff, is seeking to maximize recovery by managing the litigation and negotiating potential settlement terms.
Cox has already brought legal action from losses in the state pension fund against AIG for nearly $109 million in losses, Tyco for as much as $81 million in losses, and HealthSouth for $33 million losses.
The Republican attorney general negotiated a settlement in September with Comerica Bank that released over $1.4 billion in investments that had been frozen due to financial market troubles.