The nation’s largest public pension fund has filed suit in California state court in connection with $1 billion in losses that it says were caused by “wildly inaccurate” credit ratings from the three leading ratings agencies.
The suit from the California Public Employees Retirement System, or Calpers, a public fund known for its shareholder activism, is the latest sign of renewed scrutiny over the role that credit ratings agencies played in providing positive reports about risky securities issued during the subprime boom that have lost nearly all of their value.
The lawsuit, filed late last week in California Superior Court in San Francisco, is focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, including subprime mortgages. Calpers bought $1.3 billion of them in 2006; they collapsed in 2007 and 2008.
Are you kidding me, is that really Calpers logo…. a sun bursting through a pyramid. The symbolism is killing me. These guy pee on every tree they can find.
On a more serious note, I wonder if this leaves an opening for media coverage of CALPERS total assets under management and the performance of those assets. I’ll have to do some digging, but isn’t CALPERs wildly overfunded?