From a front page article in today’s WSJ (bold mine):
Norfolk County, Mass., has only a small pension fund, but it is a big player in court.
Two weeks ago, the fund joined with two others in a shareholder suit against drugstore chain CVS Caremark Corp., whose stock had fallen. It was the 12th time since 2006 the pension fund has gone to court after a stock it owned declined.
Twelve lawsuits in 3 years? Obviously they don’t understand the risk involved in investing. Perhaps the pension members should sue the pension managers for failing to properly research the companies they invest in. Better yet, maybe we should make a law that says pensions can ONLY hold index funds since they are skilled enough to pick individual stocks.
My thoughts totally miss the point of the article, which is about how law firms are making sizable contributions to out of state local elections. Although we don’t know the motivation for such contributions, we can speculate that it’s to win favor in any shareholder lawsuits. Getting appointed lead counsel in a shareholder lawsuit is quite lucrative. Can you say “pay-to-play?”
If you have a few minutes, give the article a read. It’s interesting.
