‘New York Versus Apple'
Contrary to your suggestion in "New York Versus Apple" [Editorial, January 25, 2007] that the city's selection process for its securities counsel was inappropriate, the city had in fact publicly issued a request for proposals in 2004 to solicit bids from the leading securities law firms nationwide on behalf of the New York City pension funds and retirement systems. After a comprehensive evaluation process, which included a review of proposals by an evaluation committee, interviews by the evaluation committee and trustees, reference checks, and detailed background investigations, the city's Law Department executed agreements with nine respected and experienced law firms in mid-2006.
Under these agreements, the Law Department selects a firm for each litigation. Significantly, the Board of Trustees of the affected pension system renders the final determination as to whether or not to proceed with this type of litigation.
The need for shareholder responsibility — which includes occasionally commencing litigation in order to recover investor losses and achieve corporate reform — is a reality of today's investment world. My predecessors and the trustees of the New York City pension system have vigorously pursued shareholder activism both to preserve shareholder value as well as to advance responsible corporate behavior both at home and abroad. We have had a number of significant successes, which include: recovering investor losses as a result of a company's mismanagement, forcing companies to divest from nations that sponsor terrorism, and requiring companies to implement and adhere to fair employment standards and nondiscrimination policies in the workplace. The city's approach is something we should be proud of and is not only ethically defensible but also makes complete business sense. Failures in corporate responsibility pose unacceptable investment risks that can — and do — lead to huge long-term losses.
My office, along with the trustees of the city's pension funds, will remain vigilant in safeguarding our retirees' investments and will continue to insist that appropriate corporate standards are maintained.
New York, N.Y.
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