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New Jersey Files Suit Against Executives and Directors of Lehman Brothers

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News release – New Jersey Files Suit Against Executives and Directors of Lehman Brothers. Eight-count complaint charges company misrepresentations led to state losing millions on stock investments in 2008.

  • “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,” Governor Corzine said. The Office of Attorney General Anne Milgram filed the lawsuit in Superior Court in Mercer County. It sets forth violations of New Jersey and federal securities laws, negligent misrepresentation, breach of fiduciary duty, fraud, and aiding and abetting. It seeks to recover compensatory and punitive damages. The state charges that the purchases of preferred and common stock were based on financial statements and materials that contained material misstatements and omissions regarding the value of Lehman’s assets that the Division of Investment could not have known were false. In addition, executives from Lehman had disavowed to representatives of the Division of Investment the company’s exposure to the collapsing real estate market and had claimed that Lehman had sufficient liquidity, a strong capital base and superior hedging, risk management and valuation practices. The suit declares that when those representations were made, Lehman executives knew, or should have known, that Lehman’s overvalued residential and commercial real estate portfolio was making it increasingly illiquid.”
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