Arecent lawsuit involving the California Public Employees’ Retirement System and The Chubb Corporation took an unexpected turn—one that may have implications for other public companies that become subject to civil securities fraud suits.
In 2000, CalPERS was the lead plaintiff in a class action accusing Chubb of falsely reporting the success of certain business initiatives, which in turn was purported to have led to fraudulently inflated stock prices. Chubb’s alleged motive was to influence the vote on a proposed stock-for-stock purchase.
