By Dale Kasler
Published: Wednesday, Feb. 6, 2013 – 12:00 am | Page 1A
Last Modified: Wednesday, Feb. 6, 2013 – 7:44 am
California’s giant public pension fund has been laboring for more than three years, without any luck, to recoup huge investment losses that it blames on Wall Street’s powerful credit-rating agencies.
It just got a huge assist.
The state’s attorney general, Kamala Harris, sued rating agency Standard & Poor’s on Tuesday, blaming S&P for a total of $1.36 billion in losses sustained by CalPERS and the state’s other big pension fund, CalSTRS. Her lawsuit came one day after the federal government sued S&P over losses suffered by investors nationwide.
Experts said the one-two punch will likely be an enormous legal boost to CalPERS, the California Public Employees’ Retirement System. Cal-PERS has been pursuing all three big ratings agencies over its losses since July 2009 but so far hasn’t collected a dime.
“I’d be shocked if it didn’t help CalPERS,” said John Hunt, a UC Davis law professor who studies financial regulation and the role of the ratings agencies.
Hunt said the ratings agencies have fended off other lawsuits in the past, but this could be different.
“Having the federal government sue you, and now the attorney general of the largest state, changes the conversation,” he said.
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