City's Unions Demand Right to Sue Wall Street for Lost Pensions
By Nicole Bode
DNAinfo Senior Editor
MANHATTAN — New York City’s teachers, police and firefighters lost billions of dollars in pension funds in the Wall Street crash, and now they want Albany to give them the right to sue to reclaim them.
Currently, New York law blocks organizations or individuals from being able to sue banks for securities fraud, and only allows legal action against them to be taken by the State Attorney General’s office, union officials said.
But every other state in the nation, except Rhode Island, allow individuals that right — and a coalition of supporters including the United Federation of Teachers and the AFL-CIO think it’s time for legislators to join them.
"Even while conservatives are clamoring to reduce public pension benefits, financial institutions that caused huge losses to these funds cannot be sued in New York courts for the losses these funds suffered," UFT president Michael Mulgrew said in a statement.
"This legislation would end the free ride that these institutions are getting on the back of New York's taxpayers and working people," Mulgrew added.
New York’s city and state pension funds lost a combined $102 billion in 2009, including city teachers' retirement system, which lost $11 billion; the city’s police pension fund, which lost $4 billion; and the firefighters’ fund, which lost $2 billion.
The legislative changes were written by Assembly member Richard Brodsky and have the support of State Senator Eric Schneiderman, whose district covers the Upper West Side, Morningside Heights, Inwood and Harlem.
"In New York, a citizen who is defrauded may take the thief to court," Brodsky said in a statement. “But a pension fund whose money is stolen by the same thief, cannot take that thief to court. That's unfair."