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CalPERS to recover more than USD300m from Standard & Poor’s in investment ratings settlements

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The California Public Employees’ Retirement System (CalPERS) is to receive approximately USD301 million in damages from Standard & Poor's (S&P) and parent company McGraw-Hill Financial. 

The payment is in settlement of cases against S&P that stemmed from its rating of mortgage-backed and other securities prior to the financial crisis.

The settlement from a suit filed by the US Department of Justice and 20 State Attorneys General, announced today by US Attorney General Eric Holder and California Attorney General Kamala Harris, will send approximately USD176 million to CalPERS. A separate settlement of CalPERS' individual suit will give the fund approximately USD125 million.

"This money belongs to our members and will be put back to work to ensure their long-term retirement security," says Anne Stausboll, Chief Executive Officer for CalPERS. "We thank the Attorney General Kamala Harris and the US Department of Justice, as well as our own legal team, for their work on these cases."

This settlement resolves charges against S&P in CalPERS' individual suit for losses CalPERS sustained from investments in three structured investment vehicles that also collapsed during the financial crisis. However, it does not resolve the same charges against Moody's Investors Service in that case.

CalPERS has recovered approximately USD900 million, to date, from settlements related to investment losses sustained during the financial crisis.

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