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New Jersey Sues Lehman Bros. for $118M

TRENTON, N.J. (CN) - New Jersey sued Lehman Bros. on Tuesday to try to recover $118 million the failed investment bank allegedly cost the state's pension fund. The state claimed Lehman hid its exposure to subprime mortgage notes and misrepresented its finances.

The state named 18 individual defendants, plus Ernst & Young accountants in its complaint in Mercer County Court. It claims Lehman Bros. violated state and federal securities laws, and accuses the defendants of fraud, misrepresentation, breach of duties, and aiding and abetting. The 18 individual defendants include nine board members and nine executives.

Lehman Bros. collapsed on Sept. 15, 2008, leaving shareholders with virtually worthless stock.

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