Executives of Lehman Brothers are sued for fraud

New Jersey state is filed a lawsuit to the state Superior Court in Mercer County against the bankrupt Lehman Brothers’ executives and directors for "fraud and misrepresentation” as reported by the state Governor Jon Corzine. The lawsuit is seeking to recover the $118 million the state pension funds lost due to the collapse of the 

In April and June 2008 New Jersey's Division of investment purchased $182 million of Lehman securities which was unusual for a U.S. state pension fund as long as such strategies are commonly used by sovereign wealth funds, hedge funds and private equity groups.

According to the statement of Corzine, a Democrat and former Goldman Sachs co-chairman, New Jersey sued the company long-term accountants Ernst & Young for allowing Lehman to "improperly account for and disclose its true financial condition." The governor said that the bankruptcy of the financial services firm last September left "shareholders with virtually worthless stock”. The statement runs that Lehman officials solicited New Jersey's money.

While in light of the company’s bankruptcy it cannot be sued New Jersey says it is suing nine top executives, including former Chairman Richard Fuld, and nine board members, including John Akers and Henry Kaufman.

The state of New Jersey states that its pension funds believed Lehman's financial statements and materials that included misstatements and omissions about the value of the company's assets and thus acquired preferred and common shares not knowing that the information was false.

Lehman officials are accused of violating federal and New Jersey securities laws, "negligent representation, breach of fiduciary duty, fraud, and aiding and abetting”. New Jersey seeks compensatory and punitive damages.