NORTH AMERICA - The Ontario Teachers' Pension Plan (OTPP) and the Arkansas Teachers Retirement System (ATRS) have reached a US$311m cash settlement in a securities class action against The Williams Companies.
OTPP and ATRS were the court-appointed co-lead plaintiffs in the Williams Securities Litigation, which also involved certain of the Williams Companies’ directors and officers, its auditor and underwriters.
The settlement is subject to approval by the United States District Court for the Northern District of Oklahoma, and represents the largest securities class action recovery in the history of Oklahoma.
A spokesperson for OTPP said the distribution of the settlement funds could not be determined until the proof of claim period was completed and the total number of investors in the class was determined.
“That is expected to occur late this summer.”
The allegations in the complaint surround Williams’ former telecommunications subsidiary Williams Communications (WCG) and Williams’ Energy Marketing & Trading (EM&T). It is alleged Williams’ failed to provide timely disclosure that it would incur a multibillion dollar loss in connection with Williams’ guarantees of certain WCG financial obligations.
OTPP and ATRS also alleged the defendants had non-public information about WCG showing that WCG’s financial condition was worse than public disclosures during the class period indicated.
In connection with Williams’ EM&T business, the complaint alleged Williams manipulated the valuation of its long-term energy contracts in the midst of the California energy crisis in 2001. Based on these valuations, the lead plaintiffs allege that Williams inflated earnings by hundreds of millions of dollars during the class period.
OTPP CEO Claude Lamoureux (pictured) commended the “US securities laws” that “had the teeth” needed to obtain the settlement, and added: “This recovery is an excellent example of the positive impact that institutional investors can have in securities class actions.
By Damian Clarkson
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers