US - New Jersey has sued several members of Lehman Brothers over losses incurred by the state pension fund following the bank's failure last year.
New Jersey governor Jon Corzine said: "With this suit we intend to hold Lehman executives and directors accountable for the fraud and misrepresentation that caused more than $100 million in losses to New Jersey's pension funds."
New Jersey pension funds invested over $120m in Lehman stock after solicitations to make the deals by Lehman executives.
The state said these purchases of preferred and common stock by the Division of Investment on behalf of the states' pension funds were based on financial statements and materials containing "material misstatements and omissions" in regard to the value of financial stability of Lehman, which the company knew or should have known to be untrue.
William G. Clark, the director of the Division of Investment, said, "The integrity of our financial markets requires that investors be able to rely on a company's financial statements and the representations of its senior management team. Clearly, the information put out by the company misrepresented Lehman's true financial condition."
The action names nine former executives at the firm, nine former board members and Ernst & Young, the bank's accounting firm.
The Division of Investment and pension funds are seeking to recover compensatory and punitive damages.
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