Louisiana Firefighters’ Retirement System

United States District Court for the Northern District of Illinois
Case No. 09-7203

Case Overview

Plaintiffs in Louisiana Firefighters Retirement System v. Northern Trust Investments, N.A. are four public retirement systems who allege that Northern Trust breached its fiduciary and contractual duties to investors when it imprudently structured and managed its securities lending program. Through its securities lending program, Northern Trust loaned securities that were owned by its clients to third party borrowers in exchange for cash collateral. This collateral was to be invested in conservative and liquid investments. Instead, Plaintiffs allege that Northern Trust invested the collateral in long-term debt, residential mortgage-backed securities, SIVs, and other risky and illiquid assets. Plaintiffs allege that Northern Trust’s imprudent management of the collateral pools caused Plaintiffs and other investors to suffer substantial losses.

On July 16, 2010, Plaintiffs filed their Amended Class Action Complaint. On May 6, 2011, the Honorable Robert W. Gettleman denied in part and granted in part Defendants’ Motion to Dismiss. Defendants answered the Complaint on July 14, 2011. On March 29, 2012, Plaintiffs filed their Second Amended Complaint which contained three counts against defendants Northern Trust Investments, N.A., and The Northern Trust Company alleging breach of fiduciary, breach of contract, and breach of the duty of good faith and fair dealing. On March 17, 2015, the Court preliminarily approved partial settlement of this case. On August 5, 2015, the Court granted final approval of the Partial Class Action Settlement finding that Settlement was fair, reasonable and adequate, and in the best interests of Settling Plaintiffs and the Settlement Class.

Settlement Class

All entities that are not governed by ERISA and that participated in Northern Trust’s securities lending program through Indirect Lending during the period beginning January 1, 2007 through and including October 31, 2010 and who were alleged to have been damaged thereby.

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