CalSTRS Named Lead Plaintiff in Homestore.com Lawsuits
Sacramento, CA – The California State Teachers’ Retirement System today announced the U.S. District Court in Los Angeles has named CalSTRS lead plaintiff in more than 19 consolidated lawsuits against Homestore.com, Inc. and several former executives.
“We’re pleased to take on this responsibility to represent the many who have suffered from unfair dealings by a few,” said Jack Ehnes, CalSTRS chief executive officer. “Shareholders must actively pursue these claims to put a spotlight on improper business practices while seeking recovered lost value.”
Other than reimbursement for court-approved costs and expenses, as lead plaintiff, CalSTRS will receive no payment beyond the prorated share of any recovery given to all members in the lawsuit. As lead plaintiff, CalSTRS will represent the claims of all the shareholders, contract for legal representation and provide testimony at trial, if necessary.
The first task is selection of a lead counsel firm. CalSTRS has begun a competitive process for lead counsel services with the successful firm expected to be named by April 25, 2002. CalSTRS’ selection of lead counsel is subject to approval by the court.
CalSTRS estimates its Homestore losses at more than $9 million on more than 431,000 shares from May 4, 2000 to December 21, 2001, the time period cited in the lawsuits. The suits allege Homestore.com falsified financial statements and engaged in accounting irregularities.
In addition to Homestore.com, defendants include Stuart H. Wolff, the company’s former chief executive officer and chair of the board; Peter B. Tafeen, former chief operations officer; and Joseph J. Shew, former chief financial officer. All three resigned either immediately before news of the accounting misrepresentations was released or shortly thereafter.
CalSTRS served previously as co-lead plaintiff with the Colorado Public Employees Retirement Association against California Micro Devices. That suit ended successfully in settlements with the company and the former chief executive officer.
CalSTRS is the third largest pension fund in the U.S., with a $102 billion investment portfolio. The pension system serves approximately 687,000 members and benefit recipients by providing retirement, disability and survivor benefits to California’s public school educators in grades kindergarten through community college. Those benefits are guaranteed by law and are not affected by changes in the investment portfolio.