The California State Teachers’ Retirement System(CalSTRS)has reached a US$105 million settlement in a securities fraud case against Time Warner, its accountants, banks and several former executives.
“CalSTRS pursued this court action to safeguard our member teachers and all stockholders for that matter,” says Jack Ehnes, the chief executive of CalSTRS. “This is yet another example of our commitment to protect investors and to establish higher levels of corporate responsibility in the nation’s financial markets.”
The suit charged that AOL artificially inflated its stock price in 2000 and 2001 prior to its merger with Time Warner, resulting in damages to CalSTRS of approximately $135 million.
The AOL case included the settlement of claims against Citigroup Global Markets Inc., Morgan Stanley & Co., Goldman Sachs & Co., Merrill Lynch & Co., Credit Suisse First Boston and former AOL senior executives. The settlement did not resolve the pension fund’s claims against AOL’s accountants, Ernst & Young LLP.
Last week, CalSTRS reached a $45 million settlement with Qwest Communications, its accountants and banks, and a $1.5 million settlement with former Qwest CEO Joseph Nacchio.
The pension fund accused the telecommunications firm of misrepresenting its financial health by artificially inflating its stock price in 2001, leading to financial restatement and shareholder losses in excess of $1.6 billion.
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