Dispatch: BWC, pension funds to benefit
3 among plaintiffs in securities case settled for $400M
By Steve Wartenberg
THE COLUMBUS DISPATCH
A forum for Ohio educators, sharing thoughts regarding their health care and pension system (STRS Ohio). Researcher John Curry manages a clearinghouse of related e-mails, articles, announcements, etc. His daily mailings include many items that do not make it to this blog. Contact John (firstname.lastname@example.org) if you wish to be on his e-mail list. Kathie Bracy: email@example.com.
(COLUMBUS, Ohio) – Ohio Attorney General Richard Cordray today announced a $400 million settlement in the class action securities lawsuit against Marsh & McLennan Companies, Inc., Marsh Inc., and former company executives Jeffrey Greenberg and Roger Egan (collectively “Marsh”). The settlement agreement negotiated by Attorney General Cordray and the New Jersey Attorney General on behalf of the lead plaintiffs holds Marsh accountable for its wrongdoing and requires Marsh to compensate investors for their injuries.
“Through violations of securities laws, Marsh harmed the investments and retirement benefits of workers in Ohio and across the country. This massive fraud was built on unethical and illegal practices and violated the best interests of clients and shareholders alike,” said Attorney General Cordray. “By serving as counsel to the lead plaintiff in the case, we were able to make sure that Marsh is held accountable and that workers, families and investors, including many in Ohio, are compensated for their losses.”
The Public Employees Retirement System of Ohio, the State Teachers Retirement System of Ohio and the Ohio Bureau of Workers’ Compensation, together with the State of New Jersey Department of Treasury, Division of Investments, have served as lead plaintiffs representing shareholders in the case.
Marsh is one of the world’s largest providers of insurance brokerage and consulting services. In the lawsuit against Marsh, the lead plaintiffs sought redress for investors who were harmed by Marsh’s failure to disclose a scheme that generated substantial earnings from illegal, anticompetitive arrangements with insurance carriers. The alleged scheme involved steering business to certain insurance carriers in exchange for kickbacks known as “contingent commissions.” According to the complaint, in some instances Marsh even generated fake bids to shield participating insurance carriers from competition. The alleged scheme violated numerous laws.
Marsh never revealed this scheme to the investing public, despite the huge role contingent commissions played in the company’s earnings. Marsh’s improper business practices came to light in October 2004 after an investigation revealed an industry-wide scandal involving price-fixing and improper bid manipulation activities. Within days of that news, Marsh & McLennan Companies lost $9 billion in market capital as its stock price collapsed. Shareholders, including many in Ohio, suffered tremendously.
The Ohio public pension funds and the Bureau of Workers Compensation noted their important role in remediating harm to investors:
“The OPERS Board of Trustees has been an active participant in securities litigation cases on behalf of our members and retirees,” said Ken Thomas, board chair. “This includes seeking compensation for unlawful behavior. We intend to continue an aggressive posture to protect the retirement dollars of active and retired public workers in the state of Ohio.”
“BWC and its Board of Directors are entrusted to protect, administer and maintain the funds needed to care for injured workers,” said BWC Administrator Marsha Ryan. “We joined this lawsuit, as a co-lead plaintiff, to send the message that we will go after those who act to harm Ohio’s workers’ compensation funds. This settlement allows us to recoup some of the losses incurred due to the wrongful acts of others.”
Attorney General Cordray, representing the Ohio Funds, has pursued an aggressive strategy of holding accountable those Wall Street companies and executives who harm Ohio investors, retirees, workers and families through violations of securities laws. At $400 million, the Marsh settlement is one of the top 25 recoveries for shareholders in lawsuits of this nature in American history.
The Marsh settlement brings the amount recovered by Attorney General Cordray in securities litigation to more than $2 billion. Recent settlements include $284.5 million with secondary defendants in a case involving AIG; $475 million with Merrill Lynch; and the cancelling of $922 million in improperly granted stock options to corporate executives at UnitedHealth.
“We are standing up for investors, retirees, workers and families,” said Attorney General Cordray. “We won’t allow Wall Street companies and executives to get away with illegal practices that injure hard-earned investments and retirement benefits.”
Attorney General Cordray continues to represent the Ohio Funds in several major securities cases, including class action securities lawsuits against AIG, Bank of America, Fannie Mae and Freddie Mac.
Attorney General Cordray has drawn on the expertise of the law firm Grant & Eisenhofer, which served as lead counsel to the Ohio Funds in the Marsh litigation. The settlement is pending final approval in the U.S. District Court for the Southern District of New York.
To read the full Preliminary Approval Order and Stipulation and Agreement of Settlement in the Marsh case, as well as additional summaries of securities litigation undertaken by Attorney General Cordray’s office, go to www.ohioattorneygeneral.gov/SecuritiesLitigationBriefing.Media Contacts:
In the days, weeks, and possibly months to come, the LEGISLATURE will be working on revisions for our Pension Benefits
COLA REDUCTION is one of the items. From all indications, it may even be the one item which may have the most impact on restoring the 30 Year Funding Period.
IT IS IMPORTANT,
that they hear from everyone requesting that any CHANGES made are FAIR TO ALL, actives and retirees.
Legislative Revisions should not be focused on just one or two items, but all the items proposed by STRS to the ORSC.
To obtain, contact information for your State Representative or your State Senator, click on the following link: http://www.legislature.state.oh.us/
1. Actives don't feel health care is important feeling they will never benefit from it. Forget the 1% to health care and direct it to pensions as we will never see HC anyway."The worst retirees will ever see is better than the best we will ever see for healthcare."2. We will never have 3% COLAS which retirees had for a long time and variable COLAS before that.We will only have 1.5% ever IF we even get COLAS.3. We will always have to pay for our spousal HC premiums and retirees had some years of nearly nothing with graduated increases we will never see IF we even still have HC.4. Retiring with higher salaries is proportionate to the times when more money is needed as we will be paying for our healthcare or higher costs for it.5. Current retirees could retire at 52, we will have to go much longer for full benefits.6. They got 13th cks for a long time and we will never see extra checks.
1. not be so dependent on risk of the market and slowly over time reduce its projection to 7%OR2. increase contributions to the Health Care fund
NEWS FLASH!!!There will be a meeting with Mr. Nehf, Dec. 07, 2009 at 3:00 p.m. at the Western Brown High School, Mt. Orab, Ohio. RSVP before Dec. 1, 2009. Duke & Jane: 937-446-2404
From Kathie Bracy, November 8, 2009
Subject: Fwd: Healthcare coverage for spouses of STRS employeesDear Mr. Nehf,Since I have not heard back from you regarding questions I posed on October 30, I am re-sending the e-mail to you (below), in case you didn't receive it.Thank you.Respectfully,
Kathie BracyFrom Kathie Bracy, October 30, 2009
Subject: Healthcare coverage for spouses of STRS employeesDear Mr. Nehf:How many STRS employees' spouses are covered by the STRS employees' healthcare? What does this cost STRS? Do the STRS employees pay any portion of the spouse's coverage? If so, how much? Thank you.Respectfully,