With comptroller Alan Hevesi in charge, the state of New York acted as lead plaintiff (via the New York State Common Retirement Fund) in the WorldCom securities case, but according to Forbes, the large settlement that resulted may not have been such a great deal for Hevesi’s client:
“Judging by a plaintiff expert’s own estimate of shareholder losses, New York’s claim of a $317 million hit would entitle it to 1.1% of the kitty, or a mere $11 million …. Hevesi’s suit cost New York’s pension fund by deflating the value of its investments in the banks it sued. The Hevesi fund owns stakes in J.P. Morgan, Citigroup and BofA. These three banks took aftertax charges totaling $3.2 billion for WorldCom settlement costs. The fund’s pro rata share of these losses, and those of smaller-fry defendants, totes up to $13 million.”
(Neil Weinberg, “Cui bono?”, Forbes, Apr. 25).
Hevesi’s campaign ties to the private lawyers who file these suits, which have come under scrutiny before (see May 14 and Dec. 10, 2004) are again a topic of criticism in parts of the press. Lyle Roberts of 10b-5 Daily (Apr. 13) rounds up the links, including a New York Sun editorial (“Hevesi by the letter”, Apr. 12).
2 Comments
Even More State Auditor Activism
Once one starts looking for something, one can find it everyhere! Yesterday, I made light of California’s potential lawsuit against AIG.
Hevesi’s Milberg connection
The political spotlight has fallen mostly at Milberg campaign beneficiary Eliot Spitzer, who’s opted to return the donations, but his less famous Albany colleague, State Comptroller Alan Hevesi, should be squirming at least as nervously, as this New Yo…