New York City Retirement Systems today reached a $78.87 million settlement with the six underwriters of two bond offerings by the former WorldCom Inc., confirmed Yvette Jackson, spokeswoman for William C. Thompson Jr., city comptroller.
The pension funds sued WorldCom bond underwriters, company directors and executives and its auditor for securities fraud after the company collapsed in an $11 billion accounting scandal. The funds sought to recover losses in both WorldCom stock and bonds. The trial was scheduled to begin in March 2006.
The settlement was reached with underwriters Citigroup, JPMorgan Chase Bank, Bank of America, Deutsche Bank, ABN AMRO and Lehman Brothers Inc., as well as former securities analyst Jack Grubman, former directors of WorldCom and WorldCom auditor Arthur Andersen. It was approved by U.S. District Court Judge Denise Cote in New York.
"This settlement represents a substantial victory for the New York City pension funds, as shareholders who invested their money and their trust in WorldCom, only to lose more than $100 million - most of which the funds have now recovered," Mr. Thompson said in a news release.
Mr. Thompson oversees the city's five public pension funds - city employees, teachers, board of education, fire and police - with a combined $87 billion in assets.
