Michigan Settlement Approved for Investors Over Bear Stearns’ Bad MBS

Michigan Attorney General ""Bill Schuette"":http://www.michigan.gov/ag/ and State Treasurer Andy Dillon announced Tuesday that a federal judge granted preliminary approval to the state's proposed national class action lawsuit against Bear Stearns and ""Deloitte & Touche"":http://www.deloitte.com/view/en_US/us/index.htm.

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Bear Stearns and Deloitte & Touche have agreed to settle the securities fraud suit. Under the terms of the settlement, the two firms will pay $294.9 million to investors nationwide who bought Bear Stearns stock and other equity securities and options between December 14, 2006 and March 14, 2008. The State of Michigan Retirement Systems (SMRS) will also receive an as yet unsettled amount.

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The final settlement hearing will be held September 19, 2012 at noon. ""Robert W. Sweet"":http://nysd.uscourts.gov/judge/Sweet, U.S. District Judge for the Southern District of New York, will oversee the hearing.

""I am pleased we have reached a settlement agreement with Bear Stearns and other defendants in this matter,"" said Dillon. ""Through this settlement process, the State has demonstrated its obligation not only to thousands of employees, retirees, and their beneficiaries who depend on these pension funds for their retirement, but also to all class members.""

The settlement is meant to compensate investors - including SMRS - who were misled about the value and risks of Bear Stearns' mortgage-backed assets.

The State of Michigan acted as court-appointed lead plaintiff in the suit and argued that Bear Stearns and their auditor Deloitte and Touche misled SMRS and other investors about risky exposure to the nation's housing market and reductions to its assets, which led to a collapse of Bear Stearns and its stock.

SMRS, which invests on behalf of Michigan public school employees, state employees, Michigan State Police and judges, holds one of the largest pension systems in the country with combined assets of approximately $50.3 billion.

""This is good news for Michigan taxpayers,"" said Schuette. ""This settlement demonstrates our commitment to holding accountable any bank or investment firm that violates the public trust.""