ORLANDO, Fla. -- Intentionally or not, the City of Los Angeles certainly timed the announcement to ensure maximum impact.
Attorneys for the city have sued Northern Trust, the title sponsor of the town’s PGA Tour event, alleging that the company frittered away city pension funds on reckless investments.
The city seeks $95 million from Northern Trust, whose tour event begins in two weeks at famed Riviera Country Club.
"Northern Trust made false claims and statements regarding its management of the assets of the Los Angeles City Employees' Retirement System [LACERS] in order to receive payments as a custodian bank and securities lending agent," according to the complaint, which was filed in Superior Court and excerpted in the L.A. Times.
As though the case alone isn't bad enough in terms of public relations, the timing could prove even more embarrassing, since Northern Trust has been hammered before for allegedly wasting money tied directly to the tour event itself.
Three years ago, after taking federal bailout money, the company was savaged by politicians and critics for staging a series of exclusive concerts, attended mostly by special invitees and featuring artists such Grammy winner Sheryl Crow.
A Northern Trust spokesman told the L.A. Times: "The Los Angeles Employees Retirement System did not lose money on securities lending. We regret that this meritless lawsuit will likely cost the LACERS pension plan, and the city of Los Angeles, millions of dollars in unnecessary legal fees and out-of-pocket expenses."
That’s the beauty of working for investment companies like Northern Trust – just like with the lawyers who will butt heads on this issue, they get paid regardless of whether they win or lose.
L.A.'s been tough of late on the tour's title sponsors. Last year, the city sued Deutsche Bank over a foreclosure issue, calling the company "slumlords."