Chicago Police Pension Fund Sues Banks Over Losses

Chicago Police Pension Fund Sues Banks Over Losses A pension fund representing Chicago law enforcement officers has filed a federal lawsuit against Bank of America Corp. and U.S. Bancorp, charging them with failure to protect the fund's investment in their mortgage-backed securities.

Bloomberg News reports that the Policemen's Annuity and Benefit Fund of the City of Chicago has stated the banks created millions of dollars in losses because they ‘regularly disregarded’ their trustee responsibilities for the Washington Mutual Inc. mortgage bonds. The fund claims the banks were aware that the securities were of a lower quality than promised and did not force Washington Mutual to buy back problematic loans.

Bank of America was the original trustee for the securities in question, with U.S. Bancorp later taking over responsibility. Neither financial institution would publicly comment on the lawsuit.


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