U.S. Bancorp was sued by an Oklahoma police pension fund over allegations investors in mortgage bonds were hurt by the bank failing to ensure that securities were backed by loans.
U.S. Bancorp knew mortgage loans underlying the bonds weren’t properly transferred to trusts and caused investors to suffer millions of dollars in losses, Oklahoma Police Pension and Retirement System said in a complaint filed yesterday in federal court in Manhattan.
The argument that US Bancorp will probably raise is that their duties were “merely ministerial” and that they’re not responsible even if they knew or should have known that the securities were defective.
There has been limited success with this argument too.
The point I’ve been raising for more than four years stands: Public-service employee pensions are not going to be paid. Not only were these people sold unicorn-style rates of return which cannot possibly be sustained the losses that were generated by all the scams and frauds are real and will be recognized — and when they are, you’re going to get a truly ugly surprise.
The police and firefighters should be marching with the Occupy folks, not opposing them.