Guam - The Government of Guam Retirement Fund has joined in a class action lawsuit filed in the federal court in the Northern District of California. According to board chairperson Joe San Agustin, the plaintiffs are going after close to $2 billion they argue they were shortchanged by a company named AXA Rosenberg.
It was in 2005 the Retirement Fund hired the company to manage a portion of its investment portfolio. According to the federal complaint the money managing firm uses a quantitative investment process, which attempts to generate profits by using computer algorithms to identify large numbers of stock that may be underpriced. Evidently there was a coding error that was never revealed to investors, leading to clients like the Guam's Retirement Fund from being shortchanged.
San Agustin says the error resulted in a much lower percentage that was calculated for benefits. "It raises the question from both sides that there may be some earnings that the fund and all the several hundred could have earned but did not earn; in other words, if the market had earnings of seven percent but because of the coding error it reduces down to four," he explained.
According to San Agustin AXA Rosenberg has admitted to the coding error and put an offer on the table to settle, but the class responded no deal. "They offer by saying you people we're willing to settle, well put up $215 million plus $25 million dollars penalty its a total of $241 million dollars but all the client including us and our legal counsel decided that's insufficient," he said.
The class contends that their claims are more than $1.6 billion held in trust for pension benefits, and demanded a trial by jury.