The Associated Press reports that the lawsuit – filed on behalf of the Public School Employees’ Retirement System, the State Employees’ Retirement System, and two other public investment funds – alleged the companies misled investors and caused the four funds to lose at least $100 million.
Other plaintiffs in the suit include accounting firm Ernst & Young and investment banks Morgan Stanley, Citigroup Global Markets Inc., Banc of America Securities and J.P. Morgan Chase & Co, according to the Associated Press.
Suits filed by state funds in California, Alaska, Ohio, New Jersey, Minnesota and West Virginia (See Alaska Funds Join Time Warner/AOL Suit Parade) also accused the companies of artificially boosting profits before and after their merger. The suits claimed suspect accounting and other maneuvers were designed to mislead investors.
After the merger, the stock traded as high as $58.51 per share before falling below $9 per share.
Participants in an AOL retirement plan also sued the company for an alleged breach of fiduciary duty by allowing investments in company stock (See Court Refuses to Dismiss AOL Time Warner Company Stock Suit ).
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