The latest on California politics and government
November 19, 2013
California’s retirement funds for teachers and state employees will receive nearly $300 million from a sweeping settlement between the Justice Department and financial titan JPMorgan.
The Justice Department has wrung a $13 billion settlement out of JPMorgan for misrepresenting the value of securities made up of mortgages. The widespread failure of similar financial products played a key role in triggering the 2007 financial crisis, and among the victims were public retirement funds that had invested in mortgage-backed securities.
Under the settlement, the California Public Employees’ Retirement System and the California State Teachers’ Retirement System – more commonly known as CalPERS and CalSTRS – will draw $298,973,000 in damages: about $261 million to CalPERS and $19.5 million plus interest to CalSTRS, with a share of the remainder going to the attorney general’s office for fees.
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