OLYMPIA -- Washington has been selected to act as the representative of public bondholders in the class action securities fraud lawsuit filed against Enron.
At the request of the the Washington State Investment Board, the Attorney General's Office today filed an amended complaint in U.S. District Court in Houston seeking to recoup $97.5 million lost in Enron bonds.
The lead plaintiff in the suit against the energy trading company is the University of California Board of Regents. The Regents are represented by the law firm Milberg, Weiss, Bershad, Hynes and Lerach.
Because of the size and complexity of the case, the lead plaintiffs have asked the court to appoint lead representatives of several categories of investors. Washington was selected by the Regents to represent public entities that purchased Enron bonds.
"This role will give Washington a voice on litigation tactics, settlements and distribution of proceeds," Attorney General Christine Gregoire said. "This gives us a chance to more aggressively pursue our contentions that Enron misled investors through improper accounting, disclosure of false information and other questionable tactics to hide its debt."
"The Washington State Investment Board has a fiduciary duty to seek to recover all losses that are a result of misleading information presented to the financial marketplace," said Gary Bruebaker, the board's acting executive director. "With that said, it is important to remember that Washington's public retirement fund investments are broadly diversified and losses related to the Enron case are an extremely small proportion (17/100s of one percent) of the total retirement fund portfolio. Retirement benefits of both current and future retirees of the state's defined benefit retirement plans are not impacted in any way by the Enron bankruptcy."