Northern Trust settles securities lending suit
20 February 2015 Illinois
Image: Shutterstock
Northern Trust has agreed to pay $36 million to settle a class action lawsuit alleging that it imprudently invested collateral received from securities lending.
The lawsuit, filed on behalf of the ExonnMobil and Texas Instruments pension funds in 2009 following the financial crisis, claimed that Northern Trust “imprudently invested collateral” received in return for loaned securities.
It also alleged that Northern Trust breached its fiduciary duty, failed to prudently and loyally manage plan assets, and that the bank violated the Employee Retirement Income Security Act (ERISA).
The bank has not admitted any wrongdoing in agreeing to pay $36 million to the pension funds.
The deal is subject to approval from the US District Court for the Northern District of Illinois.
The lawsuit, filed on behalf of the ExonnMobil and Texas Instruments pension funds in 2009 following the financial crisis, claimed that Northern Trust “imprudently invested collateral” received in return for loaned securities.
It also alleged that Northern Trust breached its fiduciary duty, failed to prudently and loyally manage plan assets, and that the bank violated the Employee Retirement Income Security Act (ERISA).
The bank has not admitted any wrongdoing in agreeing to pay $36 million to the pension funds.
The deal is subject to approval from the US District Court for the Northern District of Illinois.
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