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NC Treasurer sues bank over bad investment

RALEIGH, N.C. (AP) – The North Carolina treasurer’s office is
suing the Bank of New York Mellon, saying an unauthorized
investment resulted in a $70 million loss to the state employees’
retirement fund.

The complaint says the bank invested $95 million in state assets
in a note issued by Lehman Brothers Holding.

But the treasurer’s office said Thursday that the investment was
unauthorized because it violated North Carolina’s approved
investment list. The lawsuit says Bank of New York Mellon had an
obligation to prudently invest the state’s retirement funds.

Lehman Brothers filed for bankruptcy on Sept. 15, 2008, causing
the value of the unauthorized investment to decrease by $70
million.

A Bank of New York Mellon spokesman says the suit filed in Wake
County Superior Court is without merit.

(Copyright 2012 by The Associated Press. All Rights Reserved.)

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