CalSTRS settled its securities fraud case against Time Warner for $105 million, confirmed Sherry Reser, spokeswoman for the $157.8 billion system. The California State Teachers' Retirement System, Sacramento, had claimed that the company artificially inflated its stock price in 2000-2001 before AOL's merger with Time Warner, causing the pension plan about $135 million in losses. Also named in the CalSTRS lawsuit, filed July 2003 in California Superior Court, were investment banks Citigroup Global Markets, Morgan Stanley, Goldman Sachs, Merrill Lynch, Credit Suisse, former AOL senior executives, and accountant Ernst & Young. The settlement includes all defendants except for Ernst & Young, which is still involved in litigation.
CalSTRS opted out of a federal class-action lawsuit against Time Warner and other defendants, filing a separate lawsuit in California state court.
Time Warner representatives were not immediately available for comment.