COLUMBUS, Ohio (Legal Newsline) - The Ohio State Teachers Retirement System has approved a $475 million settlement with Merrill Lynch.
New Ohio Attorney General Richard Cordray made the announcement late Friday, saying the settlement would resolve part of a class action lawsuit against the financial services provider that is alleged to have harmed investors by backing its assets with subprime mortgages in 2007.
The STRS is a lead plaintiff in the case, filed in May 2008.
"We're still learning how far-reaching the fallout from the meltdown of sub-prime mortgages will be, but one thing is clear: Many Ohioans saw the value of their retirement savings take a nose-dive as a result of improper practices on the part of the financial giants," Cordray said.
"I'm encouraged that a portion of those losses will be restored through this proposed settlement, and it's fitting that our state and STRS Ohio would take the lead to ensure that alleged manipulation and misleading statements will not be tolerated."
The complaint alleges Merrill Lynch inflated the market price for its stock by making statements concerning collateralized debt obligations and related assets backed by sub-prime mortgages.
From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.