The assault on Public Employees and the ensuing debates are MISSING THE KEY ISSUE!
For proof, Google - pension fund losses "mortgage backed securities" suing
You will find 1,080,000 results!
Pension Fund managers invested heavily in Mortgage Backed Securities "The Crime of the Century"
The Governors are decrying
"We can't afford to honor the State's promises to its retirees any longer."
They should be apologizing:
"The Pension Funds were invested in SIVs and Mortgage Backed Securities and we lost the employees money!"
Pension funds account for $24 trillion of investments for Wall Street. Their next strategy? Gold and Commodities. What could possibly go wrong?
As with all things Politics, Money lost by Pension Funds because of the unregulated Wall Street Casino on Steroids, there seems to be conundrum. Do States sue their campaign contributors for their Public Employees' Pension Fund losses? Or do they make state tax payers, most of whom are not public employees, pay the Pension Fund shortfalls? Or both?
Either way, is it any wonder that it is easy to cause a rift between the public and non-public workers when THOSE WHO ARE RESPONSIBLE FOR GAMBLING AWAY and LOSING THE PENSION FUNDS MONEY get off scott free, while both the public and non-public workers will suffer from the Greed and Corruption?
All taxpayers will pay with increased taxes and/or decreased public services.
THE PEOPLE PAY, WHILE THE BROKSTERS AND BANKSTERS ARE PAID TO PLAY!
This where all the anger needs to be directed. The injustice of allowing crime to pay while impoverishing the rest will ruin this country! It's blatant, flagrant corruption, sanctioned by deregulation and lack of oversight or accountability.
But, some States are doing the right thing. They are suing the greedy bastards. Perhaps the other states will grow some and follow suit!
There is evidence that Pension Funds were aware in 2003 that there were problems on Wall Street which is were Pension Fund Managers go to gamble the hard earned % of wages public employees contribute from their paychecks. However, not only did things not get better, Wall Street launched into the SIV, MBS, and CDO Casino On Steroids:
State pension fund sues NYSE / Traders accused of siphoning off millions of dollars
December 17, 2003|
By Carolyn Said, Chronicle Staff Writer
California's public employee pension fund sued the New York Stock Exchange and seven leading Wall Street specialist firms Tuesday, charging that the firms routinely manipulated stock trades for profit while the NYSE knowingly turned a blind eye to the abuses.
The practice cost investors millions of dollars, the lawsuit said.
Fast forward seven (7) years:
The California Public Employees' Retirement System suing rating agencies:
Calpers, which manages about $173 billion in pensions....Calpers said it bought in 2006 $1.3 billion of medium and short-term debt issued by three SIVs: AAA rating.
It might lose more than $1 billion from structured investment vehicles
Apparently, the CALPERS fund's Chief Executive has also been sued by the State of California:
The civil suit alleges that Buenrostro — chief executive of the powerful California Public Employees' Retirement System from 2002 to 2008 — took tens of thousands of dollars' worth of gifts from Villalobos, a former Los Angeles deputy mayor who now works as a go-between for investment firms.
Villalobos and his company, Arvco Capital Research, obtained more than $47 million in "undisclosed and unlawful commissions for selling approximately $4.8 billion worth of securities to CalPERS" from 2005 to 2009, according to the suit, filed by the state attorney general's office in Los Angeles County Superior Court.
"Buenrostro … played a key role in assisting Villalobos and Arvco in their fraudulent activities," the suit alleges.
As part of the lawsuit, the state won a court order Wednesday freezing Villalobos' bank accounts and other assets.
Oregon Suing Countrywide
That alleged deceit ultimately cost Oregon: The Oregon Public Employee Retirement Fund was induced to invest $200 million into home loans originated by Countrywide, and lost $29 million as a result of misrepresentations by Countrywide and its financial underwriters, the lawsuit says.
Ohio Attorney General, Richard Cordray is an American hero.
He is on a rampage to find the criminals responsible for the near destruction caused by the Housing Crisis. Google: - ohio attorney general MERS - 39,300 hits! Where the hell are the rest of the Attorney Generals, with few exceptions?
Many are watching the lead of Ohio Attorney General, Richard Cordray, who is suing the Rating Agencies:
Ohio School Employees sue Wachovia, and its current owner Wells Fargo
The lawsuit, which the School Employees Retirement System of Ohio filed a week ago in federal court in Columbus, Ohio, alleges Wachovia breached is duties to the fund, costing the fund nearly $24 million.
Ohio Attorney General Richard Cordray recoup more than $2 Billion! More to come.
“On behalf of Ohio’s police officers and firefighters, our Board of Trustees agreed to join this suit in order to correct an abuse of public trust,” said William Estabrook, Executive Director of the Ohio Police and Fire Pension Fund. “We believe investors have a right to rely on the integrity of the ratings published by these companies.”
Attorney General Cordray’s fight to hold Wall Street accountable now includes eight major lawsuits, which have recovered more than $2 billion to date.
Recent settlements include $284.5 million with secondary defendants in a case involving AIG; $400 million with Marsh & McLennan; $475 million with Merrill Lynch; and the cancelling of $922 million in improperly granted stock options to corporate executives at UnitedHealth. (this didn't make the national news! The AG in a state can block CEOs benefits? Very interesting! diarist comment)
(Plans for further law suits) 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.
Oregon Sues Bear Stearns (not a pension fund issue, however, but worth of noting)
The Chicago Teachers Pension Fund (CTPF) along with the Atlanta City Firefighters Fund has filed a class action lawsuit against Northern Trust.
"The STEP portfolio included hundreds of millions of dollars in exotic, unregistered securities issued by “structured investment vehicles” or “SIVs” — entities that were recently identified in hearings before the congressional Financial Crisis Inquiry Commission as one of the “causes of the financial crisis” that “served no good or productive purpose in the financial system” — and millions more in securities backed by risky residential mortgages and other consumer loans.
Both STEP and Core USA held hundreds of millions of dollars of securities backed by mortgages and other consumer loans, and billions more in securities issued by banks with massive exposure to mortgages and consumer loans...."
The losses to the pension funds are in the hundreds of millions of dollars.
Detroit, Michigan: Municipal Pension Plans Sue UBS To Recover Losses In Structured Product Investments
Two Detroit retirement system pension plans are suing UBS AG for allegedly defrauding them into investing and losing $40 million in a complex structured product called a Collateralized Loan Obligation or CLO.
WHERE ARE THE NEW JERSEY LAW SUITS? Surely the NJ Pensions funds were victim to the same problems outlined in the law suits above?
New Jersey State Pension Fund Sues Lehman Executives
The New Jersey state pension fund sued top executives and board members of Lehman Brothers for misrepresentations leading to over $118 million losses due to investments in Lehman Brothers.
But, no, New Jersey actually got sued BY the SEC resulting in a slap on the hand because the NJ employees were cordial.
Oh, politics, politics:
Missouri makes taxpayers pay $20 million for pension fund losses.
Missouri Pension Fund won't ask Attorney General to sue for losses:
Chris Rackers, manager of investment policy and communication for the Missouri State Employee's Retirement System or MOSERS, said officials are not considering asking Missouri's Attorney General Chris Koster to do the same.
The board voted to establish a procedure for selecting outside legal counsel to monitor fund assets for any losses that may occur as a result of a violation or potential violation of federal and/or state securities laws or a breach of any duty owed MOSERS.
Here's a couple of other states, Maine and Alaska:
Maine, yes they are suing Countrywide.
Alaska Sues Mercer For $1.8 Billion Alleging Errors
THE ISSUE WE SHOULD ALL BE SCREAMING ABOUT IS THE USE OF PENSION FUNDS to invest in Private Equity Firms and High Risk, Wall Street Casino concoctions.
Let's not bicker about the goodness of Public Employees and/or the fairness of their contractual retirement packages that they contribute to.
Let's not let the media continue to cloud our eyes from the real issue:
CORRUPTION in every nook and cranny of our privatized world that get's to play with our money in their secret, back room deals and quant driven schemes.
Keep the pressure on. Don't let the media and the Governors, especially the GOP Governors, get away with deflecting the Truth: Pension Fund Gambling, and trying to frame the issue as "Unions are Bad" and "We have to cut services because of Unions".
The Governors, both Democratic and Republicans, all knew/know that Wall Street gets to play with and trash Pension funds.
THIS MUST STOP: PENSION FUNDS ARE NOT WALL STREET TOYS.
There must be many alternative investments that have no risk. Sure the return will be less exciting, but like any investor:
You don't gamble money you cannot afford to lose.