Friday, February 1, 2013

San Mateo County School districts investment lawsuit dismissed

Pacifica School District did not participate in this lawsuit.

Palo Alto Daily News/Bonnie Eslinger, Staff, 1/31/2013.  "Appeals court rejects school districts' lawsuit over $20 million in lost Lehman investments." 

 12 Elementary School District lawsuit against County dismissed
"A state appeals court Thursday dismissed a lawsuit filed by a dozen Peninsula school districts against San Mateo County and its former treasurer seeking to recover $20 million the county lost when investment bank Lehman Brothers collapsed.

The districts alleged in their suit that then-treasurer Lee Buffington and the county violated state laws holding public officials and agencies to a "prudent investor standard" because much of the county's investment pool was negligently funneled into Lehman and not diversified. The districts also alleged the county and its treasurer failed to recognize the "foreseeable, impending collapse of Lehman."

The three-judge panel concluded that the county and Buffington were immune from liability and the districts' lawyers had not proven the county's actions constituted a breach of contract.  In addition, the panel found that Buffington's investment decisions involved "discretionary activity which should not be the subject of scrutiny and second-guessing."  Buffington died in December 2011, according to the county."   Read more. 

Related article -  The Daily Journal (San Mateo), Staff, 2/1/13.  "High court affirms county win over schools in Lehman."  "The San Mateo County Community College District also lost an estimated $25 million itself but did not join the suit.  The county investment pool is a collection of 1,050 different accounts from cities, school districts and special agencies, some of which are obligated to invest. Following the bankruptcy, a new treasurer-tax collector was elected and the county rewrote its investment pool policy and went on the legal attack against Lehman and its executives for allegedly defrauding investors."

Posted by Kathy Meeh

No comments: