LA Sues Northern Trust Over $95M Pension Fund Losses

Law360, New York (February 2, 2012, 7:15 PM EST) -- The Los Angeles city attorney sued Northern Trust Corp. on Wednesday for $95 million he said the city pension system lost when promised “low-risk” investments turned out to be risky bets on Lehman Brothers Holdings Inc. bonds and mortgage-backed securities.

Northern Trust promised the Los Angeles City Employees' Retirement System that it would deliver “almost risk-free returns” with “minimized risk,” but actually chose risky investments tied to the mortgage industry after its own executives had been warned of the housing bubble, the complaint alleges. The Chicago-based...
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