The California Public Employees’ Retirement System (CalPERS) is poised to receive up to US$250 million in damages from Bank of America after the company reached a US$16.65-billion settlement with the Justice Department and six states.
This recovery would put CalPERS’ total recovery on losses sustained from investments in mortgage-backed securities at more than US$500 million.
Bank of America came under federal criminal investigation over its role in the financial crisis due to its misrepresentation of mortgage-backed securities it sold along with those sold by Merrill Lynch and Countrywide Financial, two companies it acquired in 2008.
“We are pleased with the continued leadership the U.S. Department of Justice and the California Attorney General have taken on this issue to protect us, our members and other investors,” says Henry Jones, chair of the CalPERS investment committee.
CalPERS is the largest public pension fund in the U.S., with approximately $300 billion in assets.
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