NJ Pension Fund and Motorola Reach $190M Settlement in Securities Fraud Case

April 18, 2007 (PLANSPONSOR.com) - Motorola Inc. struck a $190 million settlement deal with the New Jersey state pension fund, which claimed an $8 million loss allegedly stemming from the telecommunication giant's 1998 undisclosed loan to a Turkish family to set up a wireless network.

According to the New Jersey Law Journal, the fund sued Motorola four years ago in the U.S. District Court for the Northern District of Illinois for securities fraud, which allegedly started when Motorola along with other companies loaned more than $2.7 billion to another telecom company owned by Turkey’s Uzan family to set up a wireless network.

The wireless network collapsed in 2002, at which point Motorola sued the family over claims that it used hundreds of millions of dollars of funds for personal items that included the upkeep of luxury apartments in Manhattan.

The New Jersey fund learned about Motorola’s undisclosed loan because of the suit the communications company filed against The Uzan family.

Investors who owned common stock in Motorola between February 3, 2000 and May 14, 2001, would be entitled to a piece of the settlement payment if it is approved by U.S. District Judge Rebecca Pallmeyer in Chicago, according to the Journal report.

During that 15-month period, the New Jersey Division of Investment held about 2.1 million shares of Motorola stock, director William Clark told the Law Journal. It then bought another 585,800 shares during the period, for a total value of $18.2 million. The division then sold 500,800 shares during the same period for about $9.8 million.