The Alabama pension system sued former WorldCom executives and accounting and investment firms Monday, seeking $1.1 billion in damages over its losses in the Mississippi-based company.
The WorldCom litigation follows recent suits the Retirement Systems of Alabama filed against Enron and Providian Financial Corp. over losses suffered by the pension program for active and retired public employees.
CEO David Bronner said he decided to fight in court because he fears the country may be heading toward a 1930s-style depression caused by a lack of public confidence in Wall Street and because he doesn't believe the federal government is doing enough about accounting irregularities.
"I've never been as scared in my life,'' said Bronner, who has headed Alabama's $26 billion pension program since 1973.
"I have no confidence in the attorney general or the SEC chairman because for nearly a year now we've had one case after another. There has not been one arrest or one indictment. If the attorney general would worry as much about Wall Street as he does statues and breasts, we'd not have to do this,'' Bronner said.
RSA's suit Monday seeks $275 million in compensatory damages for losses on WorldCom stocks and bonds, plus $825 million in punitive damages.
It names as defendants Bernie Ebbers, former WorldCom CEO; Scott Sullivan, former WorldCom chief financial officer; the Arthur Andersen accounting firm; and four securities firms that RSA says sold it stocks or bonds: J.P. Morgan Chase & Co., Citigroup, Bank of American Corp., and Bear Stearns & Co.
Contacted Monday, Arthur Andersen stood by its recent statement that its work for WorldCom complied with professional standards and that WorldCom withheld financial information. Other defendants either did not return calls from The Associated Press seeking comment or said they could not comment because they had not yet seen the suit.
The Retirement Systems sued former Enron executives and accounting and investments firms in March, seeking $70 million for lost earnings and interest and $210 million in punitive damages. The Enron suit and the WorldCom suit do not name the companies as defendants in order to keep the litigation from being combined with class-action suits filed by banks and others in federal court, Bronner said.
He said he chose to file both cases in state court in Montgomery because it moves faster than federal court and it allows punitive damages.
RSA is the lead plaintiff in a traditional class-action suit filed in federal court in California against Providian Financial Corp. and four of its former officers. RSA lost $3.9 million on Providian, Bronner said.