City Pension Fund Goes Ahead With a Lawsuit Against Apple
The pension fund for New York City's public employees is pushing forward with its suit against Apple Inc. even though a federal judge's ruling suggests shareholders don't have a case against the company. A ruling last month by Judge Jeremy Fogel of U.S. District Court in San Jose, Calif., said the New York City Employees' Retirement System could not sue Apple over backdating stock options. Because Apple's stock has soared in value in recent years, Judge Fogel ruled that NYCERS hadn't suffered damages. He advised NYCERS to join a derivative suit, on behalf of the company, which would mean plaintiffs would not stand to receive payouts. NYCERS decided not to heed the advice. On Friday, the pension fund re-filed a new version of the suit seeking damages.
NYCERS' board of trustees, which consists mostly of elected officials, had the final decision on whether to sue. Lawyers from the city's law department play an advisory role. The pension fund is being represented in court by the law firm Grant & Eisenhofer. A hearing is set for January to decide whether Judge Fogel will allow the city to go ahead.
The complaint says Apple's shareholders, including NYCERS, which owns about 1 million shares, suffered damages when the stock price "fell over 14% following disclosures" in 2006 about how Apple had accounted for stock options. Since 2005, Apple's shares have risen about 500%.
