New Jersey Recovers $8.2 Million from Bankrupt Investment Bank
Senator Joe Pennacchio, a member of the Senate Budget and Appropriations Committee who represents Morris and Passaic counties, announced today that the State of New Jersey has settled with Lehman Brothers for $8.2 million.
The Senator noted sadly that it has been more than three years since he first asked for answers about the state’s $192 million loss on an investment in the bankrupt investment bank. The investment came less than four months before Lehman, one of the largest Wall Street investment banks, went into receivership.
“The decision to make a risky investment of this magnitude was clearly not made without the input of some appointed bureaucrat in a previous administration,” Pennacchio said. “Yet more than three years after the fact, we are no closer to learning how this remarkably bad investment was made. With this settlement, I hope that my questions can finally be answered.”
Pennacchio pointed out that he has no idea who is responsible for the investment decision because multiple letters asking for details were never answered by officials in the Corzine Administration. Further, the Corzine Administration responded to an Open Records Request by redacting all important details from documents that might have shed light on the Lehman decision. The response should include information about the roles played by all members of the State Investment Council, including the chairman and four commission members with close ties to Lehman.
“The state’s lawsuit against Lehman officials was never going to recover the full amount lost,” said Pennacchio. “It is far more important that the taxpayers find out whether an investment decision risking state pension money, was done as a favor by Wall Street insiders. The veil of secrecy surrounding this transaction leaves Main Street New Jersey distrustful and angry about how its money is invested.”