Administration January 3, 2012

Conflicts Keep NYC Pension Fund from Taking Lead in MF Global Suit

January 3, 2012 (PLANSPONSOR.com) - New York City’s largest pension will not be lead plaintiff in a lawsuit to recover millions of dollars from bankrupt MF Global.
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The New York Post reports the pension board of the NYC Employees Retirement System overwhelmingly rejected a motion to become chief plaintiff in the MF Global securities-fraud class-action suit, citing Comptroller John Liu’s hiring of two top MF Global officers. Larry Schloss, the deputy who oversees the investments of the city’s $120 billion pension fund, served on MF Global’s board of directors before going to work for the comptroller, and Kevin Davis, MF Global’s CEO for a decade before Corzine took over, was a key official in the comptroller’s Bureau of Asset Management before stepping down.  

“We can’t be a lead plaintiff against MF Global when their top employees now work for us and will be grilled as witnesses,” said one insider familiar with the deliberations, according to the Post.  

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The city’s five pension funds, which lost as much as $9.6 million when MF Global went bust, will automatically be a plaintiff in the case.

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