Browsers that can not handle javascript will not be able to access some features of this site.
hide You are viewing an archived web page, collected at the request of Library of Michigan using Archive-It. This page was captured on 10:26:21 Dec 12, 2010, and is part of the Michigan Government Web Collection collection. The information on this web page may be out of date. See All versions of this archived page. Loading media information Skip Navigation
Attorney General Web, Official Portal for the State of Michigan Home AG Home | Site Map | Contact AG | Related Links | Online Services | FAQ
Printer Friendly Version Printer Friendly   Text Only Version Text Version  Share this page.
Attorney General Cox, Treasurer Kleine Recover $24.5 Million for State Pension Fund

Contact:  John Sellek or Matt Frendewey 517-373-8060
Agency: Attorney General

May 20, 2009


           LANSING - Attorney General Mike Cox and Treasurer Robert Kleine today announced a $24.5 million settlement with Tyco International Ltd., Tyco Electronics Ltd., and Covidien Ltd. (Tyco) as a result of a securities fraud case filed against Tyco in February 2008.  The lawsuit alleged Tyco and some of its former directors and officers, violated securities laws by artificially inflating the price of its stock, which later caused Michigan's pension funds to lose millions of dollars.

        "Retirees deserve to have their pensions protected," said Cox. "That is why we pursued this case, and will continue fighting to recover funds from other bad actors, like Bear Sterns and AIG."

        The complaint alleged that Tyco continually inflated its earnings and manipulated its books to hide excessive executive compensation.  In addition, the complaint alleged that Tyco misled its investors by implementing improper accounting practices, which they internally referred to as "financial engineering."  As the scheme unraveled, a stream of financial disclosures shook the market and the value of the Tyco stock held by the Michigan pension funds plummeted.

        Cox and Kleine had earlier rejected an offer to become part of a national class action against Tyco, which, according to plaintiff's estimate, would have resulted in the state pension fund receiving only approximately $1.6 million.

         "This settlement is a clear statement that as fiduciary of State of Michigan pension funds, I will continue to take every step necessary to recover lost funds on behalf of the state's participants and beneficiaries," said Kleine. "This settlement is approximately 15 times what the funds were estimated to receive if a separate legal action had not been filed."

        The settlement proceeds will go to the State of Michigan Retirement Systems (SMRS), which invests on behalf of Michigan Public School Employees, State Employees, State Police, and Michigan Judges.   In 2006, Cox won a settlement against HealthSouth for Michigan pension funds, and is currently pursing claims against BearSterns and AIG.  The state pension fund holds combined assets of approximately $42.3 billion, making the SMRS one of the largest pension systems in the nation.



Related Content
 •  Cox Announces $67 Million Settlement with Bank of America for Anticompetitive Bond-Related Scheme
 •  Mr. President: Step Up and Stop Asian Carp
 •  Giving Wisely
 •  Cox Announces Conviction of Scott Pionk for Perpetrating $2 Million Ponzi Scheme
 •  Cox Wins Lawsuit to Stop Blue Cross Medigap Rate Increase on Seniors
 •  Cox Announces Return and Arraignment of Richard and Rita Gosselin
 •  Cox Announces Approval for Sale of Detroit Medical Center to Vanguard
 •  - CAPTURED - Cox Announces Apprehension of Richard and Rita Gosselin
 •  - CAPTURED - Cox Announces Apprehension of Richard and Rita Gosselin
 •  Cox Announces "Missing Children" Donation Box Scammer to Get Jail Time
 •  Cox Announces $750 Million Medicaid Settlement with GlaxoSmithKline
 •  Cox Announces Felony Convictions for Ponzi Scheme Targeting African-American Churches
 •  Cox Files Felony Charges against Flint Area Bar Owner for Illegal Video Poker Operation
 •  Settlement with "Old GM" Results in $160 Million to Clean Up Former GM Properties in Michigan
 •  Cox, DOJ File Antitrust Lawsuit against Blue Cross Blue Shield of Michigan
 •  Cox Praises Ruling Paving the Way for Michigan Healthcare Lawsuit
 •  Cox Announces Conviction in "Missing Children" Donation Box Scam
 •  Cox Announces Anti-Trust Settlement with Visa and MasterCard
 •  Report on FBI Fatal Shooting Released
 •  Cox Secures Final Conviction in Major Southeast Michigan Mortgage Fraud Bust Home | AG Home | State Web Sites
Privacy Policy | Link Policy | Accessibility Policy | Security Policy | AG Privacy Policy | AG Web Disclaimer | Michigan News | Survey

Copyright © 2001-2010 State of Michigan