New York pension fund to sue BP for investment losses

NEW YORK Thu Jun 24, 2010 7:28am EDT

Related Topics

U.S. Secret Service provide security for President Barack Obama in Pensacola, Florida, June 15, 2010. REUTERS/Jim Young

Protecting the President

The Secret Service detail surrounding President Obama.  Slideshow 

NEW YORK (Reuters) - New York state's pension fund plans to sue BP Plc to recover losses from the drop in the company's stock price following the worst oil spill in U.S. history, state Comptroller Thomas DiNapoli said on Wednesday.

New York's Common Retirement Fund has a long history of serving as the lead plaintiff in shareholder lawsuits. DiNapoli said the fund owned more than 19 million shares when the Deepwater Horizon rig exploded in the Gulf of Mexico in April.

DiNapoli, the sole trustee of the $132.6 billion state pension fund, has hired law firm Cohen Milstein Sellers & Toll to represent the fund.

"BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we're going to hold it accountable," said the Democratic comptroller, who will stand for election in November in the race for New York comptroller.

Dennis MacKee, spokesman for the $104 billion Florida state pension system -- one the largest in the United States -- said: "We're monitoring the lawsuit and all developments," adding, "but we have not come to any decision."

As of June 11, the Florida pension system that covers nearly 1 million retirees and active workers had unrealized losses of about $65 million on its BP investments and $21 million of realized losses since the April 20 oil-rig disaster, according to MacKee.

The Illinois State Board of Investment, which manages public pension funds, has 1,066,132 million shares of BP but "the totality of ISBI's exposure to BP is through index accounts," spokesman William Atwood said by email.

"With the exception of statutory requirements...related to Sudan and Iran...the Board's practice has been not to issue directions to equity managers regarding specific securities, so it is unlikely that the Board would issue any such direction related to BP," he said by email.

Andrew Pratt, a spokesman for New Jersey's treasurer, declined comment on New York's lawsuit. The state's $67 billion pension fund has about $45 million of BP bonds though it has sold its stock.

In contrast, the $67 billion Ohio Public Employees Retirement System has been buying BP's stock: its stake rose to 10,515,128 as of June 16 from 7,198,943 shares on April 1, a spokeswoman said.

However, BP's shares have taken a walloping since the April 20 deadly rig explosion. The value of the Ohio holding fell during that period to nearly $57 million from just over $69 million.

Investment losses in state pension funds are not the sole concern of U.S. states. On Monday, eleven East Coast states told the oil giant they will hold the company responsible for any losses caused by its oil spill in the Gulf.

Connecticut Attorney General Richard Blumenthal, who leads the coalition, highlighted the environmental damage the spill could cause.

Kenneth Cuccinelli, Virginia's attorney general, wrote BP separately, saying Virginia, its local governments and residents should be compensated for "any environmental or economic losses.

Both coastal and even a few inland states are seeing impacts from the still-gushing oil spill. For example, Moody's Investors Service on Wednesday downgraded almost $2 billion of debt issued by agencies in Nebraska, Kentucky and Mississippi that was linked to the oil giant.

(Additional reporting by Michael Connor in Miami, Lisa Lambert in Washington, D.C. and Karen Pierog in Chicago; Editing by Andrew Hay)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
bengoulson wrote:
Fantastic!

So if we all make investments in firms which turn bad can we all simply sue the relevant company?

Is this another new rule under Obamas so called “capitalist” regime?

Jun 24, 2010 11:09am EDT  --  Report as abuse
ase1972 wrote:
I’m not sure why they don’t just file a claim against the $20 Billion Obama extorted out of BP last week.

Jun 24, 2010 12:38pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.