SURS to Recoup Millions from Bank of America Settlement

SURS to Recoup Millions from Bank of America Settlement

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August 29, 2014
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The State Universities Retirement System (SURS) will receive a $2.6 million settlement from Bank of America for losses the System incurred from fraudulent mortgage-backed securities investments dating back to 2006.

On August 21, Attorney General Lisa Madigan announced Illinois would receive a total of $300 million as its portion of the national $16.65 billion settlement with Bank of America, stemming from a federal investigation into risky residential mortgage-backed securities (RMBS).

The settlement requires Bank of America to pay the five state retirement systems $200 million and to provide another $100 million in consumer relief to Illinois homeowners.

Pension system payments include $2.6 million to SURS, $154.2 million to the Illinois Teachers Retirement System (TRS), and $43.2 million to the Illinois State Board of Investment, which oversees investments for the State Employees Retirement System (SERS), the General Assembly Retirement System and the Judges Retirement System.

SURS portion is smaller than other funds because the System had less invested in the types of investments addressed in the lawsuit.

According to a statement from Attorney General Madigan, her office is continuing to investigate further banking misconduct and currently has an outstanding lawsuit against Standard and Poor’s, alleging the company compromised its independence as a rating agency by doling out high ratings to unworthy, risky investments as a corporate strategy to increase its revenue and market share.