Judge approves $335M settlement for PSERS, other investors

David O'Connor//December 30, 2016

Judge approves $335M settlement for PSERS, other investors

David O'Connor//December 30, 2016

The settlement, stemming from an investor class-action suit against Bank of America Corp., was approved Tuesday by Judge William Pauley III of the U.S. District Court for the Southern District of New York.

It “is one of the largest class-action settlements of securities purchaser claims brought about as a result of the financial crisis of 2008,” PSERS said Thursday in a press release.

PSERS served as the court-appointed lead plaintiff on behalf of everyone who bought Bank of America Corp. common stock or common equivalent securities on a U.S. public exchange and suffered losses in the period from Feb. 27, 2009, through Oct. 19, 2010, system spokeswoman Evelyn Williams said.

The suit claimed Bank of America misled investors about its position in mortgage-backed securities in the 2009-10 time period, Williams said.

“Class members who filed valid proof-of-claim forms will share in the settlement proceeds. The settlement represents a significant recovery for Bank of America shareholders,” the news release noted.

Williams said Friday the amount PSERS will receive was not immediately available.

As of Nov. 16, there were some 374,000 “timely proof-of-claim forms” submitted, she also said Friday.

The executive director of the retirement system, Glen Grell, said in a statement that system officials are pleased “to have achieved this substantial recovery for the class.”

The settlement negotiations were supervised by a mediator, PSERS said.

PSERS is the 20th-largest state-sponsored defined benefit public pension fund in the U.S., with net assets as of the end of 2016’s third quarter of around $51 billion, and a membership of over 257,000 active school employees and nearly 225,000 retirees.