Wednesday, November 16, 2011

San Mateo county investment lawsuit dismissed, 12 school districts appeal


Based upon the relatively "low risk" investment portfolio, prior passive approval of the 12 school districts, and the authority of the county agency (Treasurer's office)--  from my view as a citizen and having participated the securities industry, this is a lawsuit going nowhere.  

San Mateo Times/Joshua Melvin, 11/14/11.  "A judge has dismiss
ed a lawsuit filed by local school districts seeking to recover from San Mateo County a $20 million investment lost when Lehman Bros. collapsed. But the money fight between the governmental agencies now likely will head to appellate court. Plaintiffs attorney Farley Neuman said he would appeal in the next 60 days the decision issued Thursday by San Francisco Superior Court Judge Richard Kramer.

"This is a temporary victory, in my view," Neuman said of the dismissal.  San Mateo County lost $155 million, including the $20 million from 12 school districts, it had invested with Lehman Bros. The company filed for bankruptcy in September 2008. The county investment pool also has a lawsuit pending against the Lehman estate in hopes of getting some of that money back.

The 12 school districts alleged in their suit that then-treasurer Lee Buffington and the county made investments in Lehman Bros. that violated their own policies. The schools claimed the loss was due to negligence.  Michael Celio, who represents San Mateo County, said that's plain wrong. He expects the appeal, but he said it's a waste of more taxpayer money. He added that the schools were fully informed about the investments.  "They were happy as long as they were making money," he said. "As soon as the investments went bad they took action."  Neuman said the basis of his appeal is that the county did not invest with the skill and care the "They are not immune from liability for imprudently investing the money of the school districts," Neuman said.aw requires. He cited government code section 56300.3, which requires government agencies to act with prudence and diligence."

Posted by Kathy Meeh

2 comments:

Anonymous said...

Eh, can't squeeze blood from a turnip. Izat howz it goez? Anyhoo, you will never see a dime of that loss. Get over it, move on.

Anonymous said...

Dead horse. Useful only in France.