Schuette, Dillon Announce Settlement with Bear Stearns, Deloitte & Touche
Michigan Attorney General Bill Schuette and State Treasurer Andy Dillon have announced a federal judge has granted preliminary approval to Michigan's proposed national class action securities fraud lawsuit against Bear Stearns and Deloitte & Touche. Under the terms of the agreement, Bear Stears and Deloitte & Touche will pay investors nationwide $294.9 million. The amount the State of Michigan Retirement Systems (SMRS) will receive as part of the settlement will be finalized at a later date. The final settlement hearing will be held at noon on September 19, 2012.
Schuette said "this is good news for Michigan taxpayers. This settlement demonstrates our commitment to holding accountable any bank or investment firm that violates the public trust."
Dillon added "I am pleased we have reached a settlement agreement with Bear Stearns and other defendants in this matter. Through this settlement process, the State has demonstrated its obligation not only to thousands of employees, retirees, and their beneficiaries who depend on these pension funds for their retirement, but also to all class members."
As part of the agreement, the companies have agreed to pay $294.9 million to investors nationwide who bought Bear Stearns stock and other equity securities and options from Decemeber 14, 2006 to March 14, 2008. The settlement is meant to compensate investors, including SMRS, who were misled about the value and risks of Bear Stearns' mortgage backed assets.
The State of Michigan acted as the court-appointed lead plaintiff in the lawsuit, and argued that Bear Stearns and their auditor, Deloitte & Touche misled the state's pension fund and other investors about risky exposure to the U.S. housing market and subsequent write-downs to its assets, which led to a collapse of the company and its stock.
SMRS, which invests on behalf of Michigan public school employees, state employees, Michigan State Police and Michigan judges, hold combined assets of approximately $50.3 billion, making it one of the largest pension systems in the nation.