Federal Judge Permits $12 Billion Suit Against GE to Go Forward

A Manhattan federal judge ruled Jan. 12 that an Illinois pension plan could proceed with its efforts to bring a class action against General Electric on behalf of investors who purchased $12 billion of the company’s stock. The plaintiff claims that investors were misled by GE and several large financial institutions about the company’s exposure to subprime mortgages and other risky investments during the recent financial crisis.

Southern District Judge Richard J. Holwell (See Profile) kept alive most of the suit against GE, several of its officers including CEO Jeffrey Immelt, and the company’s underwriters—a group of 27 financial institutions including Goldman Sachs, Barclays Capital, Morgan Stanley, J.P. Morgan Securities, and Citigroup Global Markets. The lead plaintiff, the State Universities Retirement System of Illinois, is represented by Berman DeValerio and Lowey Dannenberg Cohen & Hart. GE and its officers are represented by Weil, Gotshal & Manges, while the underwriters are represented by Willkie Farr & Gallagher.