Updated with correction
The $7.6 billion Wyoming Retirement System, Cheyenne, is receiving a portion of a $340 million settlement from a lawsuit against former executives and institutions associated with mortgage-backed securities sold by the failed savings and loan IndyMac Mortgage Services, state officials announced.
The state treasurer's office, led then by Treasurer Joseph Meyer, and the pension fund were co-lead plaintiffs in the suit, filed in the U.S. District Court in New York in July 2009. The suit claimed IndyMac sold asset-backed securities without regard to risk.
The lawsuit had cited an earlier report by the Center for Responsible Lending that concluded that IndyMac “encouraged its employees to approve loans regardless of the borrower's ability to repay.”
The settlement was announced Friday by current state Treasurer Mark Gordon and fund officials. "We believe this is a good settlement. It offers a meaningful recovery to investors, including the state of Wyoming," Mr. Gordon said in a news release. Benjamin Brandes, retirement system general counsel, said the system had no comment.
Original defendants included former IndyMac Chairman and CEO John Olinski, and former Executive Vice President S. Blair Abernathy, as well as underwriting firms Bank of America Corp., Countrywide Securities, Credit Suisse Securities, J.P. Morgan Securities and Bear Stearns, among others.
