Judge: Pension fund can’t claim Harvey, Illinois’ federal ARPA aid

Link: https://www.bondbuyer.com/news/judge-pension-fund-cant-claim-harvey-illinois-federal-arpa-aid

Excerpt:

A state judge refused to block distribution of Harvey, Illinois’ share of American Rescue Plan Act federal coronavirus aid relief funds after rejecting a pension fund’s claim to the money.

The financially stressed Chicago suburb, which has battled over the last decade with its public safety pension funds, Chicago, and bondholders over its obligations, settled a legal dispute in 2018 with its police and firefighters’ pension funds over past due payments. The settlement gives the funds a share of various funding that flows through the state government.

The firefighters’ fund recently sued Harvey to stake a claim to the ARPA money, arguing it is subject to the 10% claim on city tax and aid funds that are sent directly to the pension fund under the 2018 settlement. The fund asked the court to enjoin Comptroller Susana Mendoza, whose office manages the state’s pension intercept program, from distributing any funds until the case was argued.

Author(s): Yvette Shields

Publication Date: 28 June 2021

Publication Site: Bond Buyer

Schoolyard Justice in Federal Court

Link: https://www.wsj.com/articles/schoolyard-justice-in-federal-court-11623171249

Excerpt:

 The bank administered a loan of some $1 billion, sending payments from Revlon to the lenders. Citibank mistakenly sent a wire transfer of the entire principal amount due when it only intended a single installment.

Under established law, the money that Citibank wired should be repaid because it was sent by mistake. But U.S. District Judge Jesse Furman upset settled law and allowed lenders to keep the money on the ground that the recipients did not have notice that the funds had been sent erroneously. If that became the rule, it would upset the important relationships among lenders, borrowers and trusted intermediaries.

….

Mistakes like this occur with surprising frequency. In 2017, the German bank KfW mistakenly transferred $5.4 billion to lenders. In China, the bank Rural Commercial Bank in Changsha thought that a customer’s 10-digit account number was actually the amount of money to be transferred, and mistakenly sent 1.2 billion yuan (around $190 million) to the customer. Deutsche Bank recently sent $6 billion to a U.S.-based hedge fund in error. In all these cases, the banks recovered the errant funds transfers almost immediately.

Author(s): Jonathan Macey

Publication Date: 8 June 2021

Publication Site: Wall Street Journal

Members of teacher pension fund planning lawsuit to force transparency

Link: https://news.yahoo.com/members-teacher-pension-fund-planning-110300430.html?guccounter=1

Excerpt:

About 1,000 current and retired Ohio educators skeptical of the true financial shape of their $90 billion state pension fund are preparing to sue to force greater cooperation with a $75,000 self-funded investigation of its books.

The forensics audit, financed through money raised from members, is being undertaken by pension investment expert Ted Siedle — a former Securities Exchange Commission attorney, financial forensics investigator, and co-author of the book “Who Stole My Pension?”

The public records lawsuit will ask the Ohio Supreme Court to force the State Teachers Retirement System, serving some 500,000 active, inactive, and retired members, to release information that investment firms have claimed is proprietary or a trade secret.

Author(s): Jim Provance, The Blade, Toledo, Ohio

Publication Date: 3 May 2021

Publication Site: Yahoo News

CalPERS Employee Accused of Embezzling $685,000 from Beneficiary Bank and CalPERS Accounts Hasn’t Been Arrested, Much the Less Prosecuted. Why the Cover Up?

Excerpt:

As you can see from the embedded filing below, CalPERS is suing Gloria Najera, a former employee it says embezzled $685,000 from beneficiaries, including, Wells Fargo style, from a beneficiary’s bank accounts.

The civil claim is sketchy on the timetable, but Najera was a clerical worker responsible for updating beneficiary addresses and bank direct deposit information. That apparently also gave her access to at least the last four digits in their Social Security numbers. Najera used this information to pilfer directly from the bank account of one beneficiary to the tune of nearly $69,000. For nine others, she diverted funds from dormant CalPERS accounts (where CalPERS had reason to think the beneficiary was still alive but had only out-of-date bank deposit information) to bank accounts controlled by Najera and co-conspirators.

Yet despite CalPERS allegedly informing the police about the theft back in January, the perp of this huge embezzlement of beneficiary trust funds hasn’t even been arrested, much the less charged.

CalPERS instead is taking the virtually unheard of approach of merely filing a civil suit, rather than letting a prosecutor file criminal charges, even though California law requires that a criminal court order full restitution on behalf of CalPERS.

Author(s): Yves Smith

Publication Date: 22 April 2021

Publication Site: naked capitalism

Ambac files motion to compel documents from actuary – Puerto Rico pensions

Document Link: https://drive.google.com/file/d/1-lIsmyzEIiDvYXnYJtWw5kaCI25euLFk/view

Snippet:

Date Accessed: 21 April 2021

Shared by: Cate Long

Publication Site: Twitter and Google Drive

Singing River retirees file new lawsuit over failed pension. ‘It’s not fair,’ nurse says

Link: https://www.sunherald.com/news/local/counties/jackson-county/article250528304.html

Excerpt:

Singing River Health System retirees are learning to live on lower pensions than they expected as attorneys continue to press for financial damages from companies they believe are responsible.

A new lawsuit has been filed over the 2014 failure of the SRHS retirement plan, which caught hundreds of retirees and employees by surprise. Biloxi attorney Jim Reeves is suing accounting firm KPMG LLC and Transamerica Retirement Solutions on behalf of 272 members of the retirement plan.

Reeves said in a news release that the companies were paid “hundreds of thousands of dollars to help manage and audit the pension plan and to accurately communicate the status of the plan to members.”

Author(s): Anita Lee

Publication Date: 12 April 2021

Publication Site: SunHerald

Sooner Or Later, The Supreme Court Will Be Forced To Decide The Tax Future Of 2 Million Workers

Link: https://www.forbes.com/sites/lizfarmer/2021/03/18/sooner-or-later-the-supreme-court-will-be-forced-to-decide-the-tax-future-of-2-million-workers/

Excerpt:

New Hampshire and Massachusetts are fighting over whether the Bay State still has the right to tax the incomes of 103,000 former commuters now working from home in New Hampshire. But this tax spat deals with issues that spread far beyond the Massachusetts border — it has national implications and could impact millions of Americans.

Because of this, scores of tax organizations and states have filed briefs with the U.S. Supreme Court in support of the Granite State. In fact, an analysis by the National Taxpayers Union Foundation estimated at least 2.1 million Americans that previously crossed state lines for work are now working from home in accordance with public health guidelines.

Author(s): Liz Farmer

Publication Date: 18 March 2021

Publication Site: Forbes

Did IL state lawmakers unconstitutionally borrow billions of dollars? IL Supreme Court to decide

Link: https://cookcountyrecord.com/stories/580283019-did-il-state-lawmakers-unconstitutionally-borrow-billions-of-dollars-il-supreme-court-to-decide

Excerpt:

Tillman, of suburban Golf, centered his claims on Article IX Section 9(b) of the Illinois state constitution. Tillman argued that provision of the state constitution limits the state’s ability to borrow money.

The complaint particularly focuses on text requiring lawmakers to identify “specific purposes” for debt when issuing new long-term bonds. Tillman argues that “specific purposes” clause should be read to forbid state lawmakers from borrowing money to finance deficits or “plug holes” in the state’s budget, such as the shortfall faced by the state when funding pension obligations.

Tillman has argued lawmakers in both 2003 and 2017 failed to identify “specific purposes” when it issued bonds, and then unconstitutionally assigned to the state comptroller the power to decide how the borrowed money was spent.

Author(s): Jonathan Bilyk

Publication Date: 19 March 2021

Publication Site: Cook County Record

Pritzker must provide discovery in COVID-19 challenge or face sanctions

Link: https://www.thecentersquare.com/illinois/pritzker-must-provide-discovery-in-covid-19-challenge-or-face-sanctions/article_41683d52-7b81-11eb-8a54-e391cea9ed33.html#new_tab

Excerpt:

Gov. J.B. Pritzker’s administration has a Wednesday deadline to start turning over documents justifying why it ordered restaurants to limit their operations during the COVID-19 pandemic.

Attorney Greg Earl, with Myers, Earl and Nelson P.C., represents Geneva-based FoxFire restaurant, which sued the governor last fall.

“FoxFire is continuing this fight because what happens if another strain, that’s what we’ve heard of, another strain from Europe or South Africa hits and the governor decides to put in another 30-day window,” Earl said.

The governor has already issued 12 months of executive orders related to the pandemic. His most recent order issued Feb. 5 expires March 7.

Author(s): Greg Bishop

Publication Date: 2 March 2021

Publication Site: The Center Square

Eviction Moratorium Deemed Unconstitutional by Federal Judge in Texas

Excerpt:

Judge J. Campbell Barker of the Eastern District of Texas, sided with plaintiffs who challenged the CDC’s eviction moratorium on Constitutional grounds. We’ve embedded the opinion for Terkel v. Centers for Disease Control and Prevention at the end of this post. Even though some will be inclined to dismiss the ruling as politically-motivated (Barker was a Trump nominee), recall that it was the Trump Administration that first launched the eviction freeze. It initially ran through December 31, and covered tenants who gave their landlord a declaration attesting that the made less than $100,000 a year, had suffered a large hit to their income, were seeking assistance and would pay as much rent as they could. The Biden Administration planned to extend the moratorium to the end of March.

Bear in mind that the eviction halt dumped the cost of keeping coronavirus-whacked workers housed on landlords, rather than having the government provide income or rental subsidies.

Before we turn to the reasoning of the ruling, keep in mind that Judge Barker did not issue an injunction against the CDC’s moratorium, since the CDC apparently made noises at trial that they’d withdraw the moratorium if they lost. However, Barker told the plaintiffs they could come back and seek an injunction if the CDC didn’t play nice. There is no indication yet as to whether the Administration will appeal.

Author(s): Yves Smith

Publication Date: 26 February 2021

Publication Site: naked capitalism

Chief GameStop Tout and Registered Representative Keith Gill, Target of Class Action Suit, at Congressional Hearings Today

Excerpt:

The filing argues that Gill’s Roaring Kitty/DeepFuckingValue persona was a ruse, intended to hide his status as an industry professional who’d bought GameStop at prices averaging $5. The filing curiously doesn’t include Gill’s (presumably not faked) E*Trade account shots as part of the ruse, since any registered rep is normally required to trade only though his employer.1

The tricky part is that securities fraud, and this is a securities fraud case, requires establishing intent, which the lawyers call scienter, as in knowing in advance that what they were doing was wrong. The fact that Gill has so many securities licenses will make it pretty much impossible for him to pretend that he didn’t know what the relevant rules were. So his defense is likely to rest on “Gee, I thought this was a great trade. How was I to know so many people would agree and make the same bet?”

The filing makes a good go at pre-rebutting that. Even though Gill initially depicted his YouTube channel as being about general financial education, it became more and more fixated on GameStop, with “at least” 56 of 80 presentations devoted to it, and many of them discussing its vulnerability to a short squeeze. Virtually all of his tweets from July 2020 were about GameStop.

Author(s): Yves Smith

Publication Date: 18 February 2021

Publication Site: naked capitalism

Hoist on His Own Petard? Kentucky Attorney General’s Apparent Plan to Settle Landmark Pension Case Mayberry v. KKR Likely to be Undermined by Discovery

Excerpt:

Cameron’s filing was almost entirely dependent on the original plantiffs’ documents. It’s become increasingly evident that Cameron never intended to litigate. The best guess is that Cameron needed a distraction from bad Brionna Taylor headlines, and also saw the Mayberry v. KKR case as an opportunity to engage in a little shakedown by making a potentially explosive case go away via a cost-of-doing-business settlement.

But Cameron appears to have badly underestimated his opponents, led by the formidable attorney Michelle Lerach and her husband, the disbarred but still very much feared Bill Lerach, who acts as a consultant. A quick and cheap settlement can occur only if the defendants can escape what they fear most, discovery. But the latest order from Judge Philip Shepherd shows he is moving forward with the reconfigured case, now involving “Tier 3” beneficiaries in a hybrid plan that does not have a state guarantee. That upsets Cameron’s plans to settle the case before the Tier 3 plaintiffs go going, which would allow his to go lowball based on public information and the limited discovery to date.

Author(s): Yves Smith

Publication Date: 19 February 2021

Publication Site: naked capitalism