GLOBAL - The New York State Common Retirement Fund is suing BP over losses incurred through the oil spill in the Gulf of Mexico.
Fund trustee and New York State Comptroller Thomas DiNapoli announced last night that Cohen Milstein Sellers & Toll had been hired to represent them for the class-action suit.
With $132bn (€108bn) of assets under management, the New York State Common Retirement Fund is one of the largest pension funds in the US and held more than 19m BP shares at the time of the explosion on the Deepwater Horizon oil rig.
DiNapoli said in a statement yesterday that it was his duty to defend the interests of the fund and the retirees and employees who rely on it.
"BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill, and we're going to hold it accountable," he said.
The fund is seeking to lead the class-action suit, essentially be the lead plaintiff, in an attempt to recoup losses made after BP's share price dropped by 50% following the oil spill.
DiNapoli first hinted last week he was considering legal action against BP. (See earlier IPE article: New York State pension fund mulling BP lawsuit)
BP could now face class-action suits from many other pension funds, even those outside the US.
Current securities regulations mean class-action suits cover any investor buying stock, even from exchanges outside the US, according to Jerry Silk, senior partner at Bernstein Litowitz Berger & Grossmann.
"We have been talking to investors both from the UK and the US who are also considering making the motion for a lead in the case," he said.
While the New York State Common Retirement Fund will aim to be the lead plaintiff, there are currently no others signed up to the motion.
Lead plaintiff status is assigned to those investors with the biggest losses.
However, the range of class-action lawsuits is currently undecided, with the US Supreme Court currently presiding over a case against National Australia Bank (NAB), which will "determine the scope and the extra-territoriality of the US securities laws," according to Silk.
A verdict in the NAB case is expected in a week.
However, not all pension funds are disenchanted with BP following the share price drop.
According to CNN, the California Public Employees' Retirement System (CalPERS) has bought almost 2m additional shares in BP since April 20, when the explosion on the rig that killed 11 employees occurred.
This means CalPERS now holds more than 60m shares in the oil giant.