The NY fund, which is directed by State Comptroller H. Carl McCall, claims it lost an estimated $306 million from the collapse of WorldCom. The fund covers 950,000 active and retired government employees and their beneficiaries.
In rendering the decision, US District Judge Denise L. Cote noted the “massive loss” and described New York’s fund as “an institutional investor with an extraordinary stake in this action, represented by able counsel.”
The fund is represented by two law firms, Bernstein Litowitz Berger & Grossmann LLP of New York and Barrack Rodos & Bacine of Philadelphia. The firms also served as co-lead counsel in shareholder litigation against Cendant, a case that resulted in a $3.2 billion award, one of the largest securities settlements ever.
According to Dow Jones, lawyers for the New York pension fund have asked the judge to merge the shareholder suits against WorldCom and its auditor, Arthur Andersen, with a group of suits against Citigroup and Salomon Smith Barney analyst Jack Grubman, who has been accused of continuing to be overly bullish about the stock – right up until the company went public with its restatement announcement.