In the following story, you can see how the pension funds of the working and middle class find their way into the coffers of the rich where they sometimes disappear.
Goldman Sachs is being sued by two pension funds: IBEW Local 90 Pension Fund and the Plumbers & Pipefitters' Local #562 Pension Fund. The funds represent shareholders in MF Global Holdings. Goldman Sachs Group Inc. and JP Morgan Chase are accused of making "misleading statements" (read fraudulent statements) about MF Global that concealed exposure to European sovereign debt.
Of course, MF Global is run by an ex-Goldmanite, Jon Corzine.
JP Morgan, Goldman Sachs Sued for Alleged MF Global Misstatements
By Michael Hytha - Bloomberg Businessweek
Nov. 19 (Bloomberg) -- JPMorgan Chase & Co. and Goldman Sachs Group Inc. units were sued by two pension funds over claims they made misleading statements about the exposure of MF Global Holdings Ltd. securities to European sovereign debt.
As a result of the misstatements, MF Global's stock traded at “artificially inflated prices,” the funds said in the complaint filed yesterday in federal court in Manhattan. “While the extent of MF Global's exposure to European sovereign debt was concealed, the defendants were able to raise some $900 million in the offerings.”
MF Global Holdings, which was run by former Goldman Sachs Group Inc. co-chief executive officer Jon Corzine, filed for bankruptcy Oct. 31 after making bets on sovereign debt and getting margin calls. The New York-based company listed debt of $39.7 billion and assets of $41 billion in Chapter 11 papers. The broker-dealer is being liquidated separately.
Other companies named as defendants in the complaint were Bank of America Corp.'s Merrill Lynch unit, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBS Securities Inc. and Jefferies & Co. Corzine and MF Global officers were also named as defendants.
The complaint was filed by IBEW Local 90 Pension Fund and the Plumbers & Pipefitters' Local #562 Pension Fund. The funds seek to represent other shareholders in a class-action, or group suit.
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