: Fenix Investors

California Democratic Attorney General Xavier Becerra announced the settlement with Morgan Stanley on Thursday. The bank will pay $150 million. Of that, $122 million will go to the California Public Employees’ Retirement System and $8 million will go to the California State Teachers’ Retirement System. The rest [$20 million] will go to the Attorney General’s Office.
From 2003 to 2007, Morgan Stanley sold California’s two largest pension systems bundles of thousands of mortgage loans. But Becerra said the financial giant did not adequately assess those loans to remove the risky ones, and then lied about it to the pension systems.
Becerra said the bad investments from Morgan Stanley cost the pension systems more than $100 million.
Together, California’s two largest pension systems cover more than 2.5 million people. Their assets have a combined market value of more than half a trillion dollars. Still, the plan for state and local employees has about 68 percent of the money it needs to pay benefits over the next few decades, while the plan for teachers has about 63 percent of the money it needs.