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.
I don’t understand why Calpers is getting so worked up – the cushy retirement system provided to California state retirees under Calpers is 100% guaranteed by the taxpayers no matter what happens to their investments. The public employee BEAST, the overblown salaries, benefits and retirement system, is the top reason the State of California is broke. (That along with the other part of the BEAST – carte blanche social services delivered ad nauseum to illegals). I live in a community in California where there are many California state retirees, mostly teachers, who,, by the way typically retired in their fifties and not uncommonly have two houses, newer model cars, RVs, etc. – you get the picture. We who work in the private sector and saw our retirement, savings and investments decimated by all the fraud have to start over – no one to bail us out because we are the ones whom the BEAST feeds off of. I’m in my fifties and have to start over, Calpers recipients have billions in funds, taxpayer guaranteed AND the money to hire lawyers because they, the greedy, got bit by the greedy. Sorry, can’t shed a tear on this one. The California public employee unions are why many of us have either left California, or plan to as soon as we can unload our real estate and move on.