Officials in the US are suing shopping-mall developer Mills Corp. over alleged accounting fraud that cost the state pension fund more than $5 million in stock-market losses.
“This is becoming an all-too-common story all over the country – hard-working men and women . . . being cheated out of the retirement money they rightly earned and deserved,” Attorney General Tom Reilly, a Democratic candidate for governor, said yesterday in announcing plans to join a class-action lawsuit against Mills.
The pension fund, which invests money to cover state workers future retirement benefits, holds an undisclosed amount of the companys stock.
However, Mills shares have been plummeting on the New York Stock Exchange ever since the company revealed problems last year with its books.
Mills shares traded as high as $65.66 last summer, but closed yesterday at $30.54 – a new 52-week low. The stock has lost 17 percent of its value in just the past two trading sessions.
Mills officials declined to comment on yesterdays move. However, the company has previously announced plans to restate five years of earnings reports because of accounting problems.
Mills has also put itself up for sale, announced retirements or dismissals of 17 executives and cut 77 jobs to reduce costs.
Additionally, the Securities and Exchange Commission has opened a probe into the firm. Mike Travaglini, executive director of the state pension fund, said the Mills investment represents only about 0.1 percent of the trusts total assets.
But Travaglini added: “If we are essentially defrauded by one of the companies we choose to invest in, were going to make every effort to hold those companies accountable – and recoup any financial losses.”