Arkansas Lawmakers To Probe Pension Fund's Role in Securities Class Action

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July 16, 2018

Arkansas lawmakers will hold a hearing to discuss the Arkansas Teacher Retirement System’s (ATRS) involvement in securities class action lawsuits after a federal judge in Massachusetts raised questions about the system’s relationships with lawyers, the Arkansas Democrat-Gazette reports.

The federal judge overseeing the $300 million securities lawsuit against State Street Corp., where ATRS is the lead plaintiff, appointed a special master to investigate potential overbilling by the plaintiffs’ lawyers but seems to have uncovered a pattern of “questionable conduct.” At the center of the controversy is the controversy is a referral feeworth millions of dollarsthat was paid to another lawyer who introduced ATRS to the lawyers, but was not involved in the case.

Some lawmakers in the state, the article says, are concerned about the negative exposure ATRS is getting because of its involvement in such suits, particularly after it was revealed that  ATRS  will likely only earn about $300,000 of the $300 million settlement. The Joint Committee on Public Retirement and Social Security Programs and the Joint Performance Review Committee will hold the combined hearing tomorrow morning.