The Washington State Investment Board on Wednesday filed a lawsuit to recover more than $100 million in losses related to the purchase of investments from Lehman Brothers Holdings, Inc.

Among the defendants are former Lehman executives and directors, underwriters for the offerings and Ernst and Young, the firm’s outside auditor.

According to a release today, the lawsuit alleges violations of federal and state securities laws, negligent misrepresentation and breach of fiduciary duty.

Lehman itself is not named as a defendant as it filed for bankruptcy protection last September.

“We have a fiduciary duty to pursue recovery of these losses,” said WSIB Acting Executive Director Theresa Whitmarsh. “It’s our belief that had the defendants been more transparent and accountable, these losses could have been minimized or even avoided.”

Attempts to reach some of the defendants Wednesday were unsuccessful.

The suit, filed in Thurston County Superior Court, alleges that documents filed in connection with the securities offerings failed to disclose Lehman’s negative returns on troubled mortgages, including sub-prime loans, and the true value of its mortgage-related assets. Also, the lawsuit alleges that Lehman’s financial statements failed to comply with applicable accounting standards.

The suit was filed on the investment board’s behalf by the Office of the Attorney General and the law firm of Coughlin Stoia Geller Rudman & Robbins LLP. The Coughlin firm was hired for its expertise in federal securities law and securities litigation and is serving as a special assistant attorney general pursuant to a contract with the office, the release said.

Previously, the firm successfully represented the state in a suit to recover losses related to securities fraud at telecommunications giant Worldcom.

According to Whitmarsh, the state board was also successful in recovering some assets from Enron.
“We did receive recoveries,” she said in an interview Wednesday. In the Lehman case, she said, “we’re optimistic.”

A copy of the suit is available here.

The suit was filed in the 9 a.m. hour today, said Dan Sytman, spokesman for the state attorney general. Commenting on the breadth of the Lehman controversy and other claims, he said, “I know there are a lot of folks who want a piece.”

The suit notes that former Lehman Chairman and CEO Richard Fuld, also a defendant, “received $111.8 million from FY 2003 to FY 2008 in salary, bonuses and restricted stock unit awards.”

Other defendants include Citigroup Global Markets, Wells Fargo Securities LLC, Commerzbank Capital Markets Corp. and Countrywide Securities Corp., as well as various consulting groups, investment banking concerns and auditors Ernst & Young.

At one point in the 64-page suit, the state alleges that “the borrowers or brokers inflated the income reported on the ... ‘liar loans.’ The brokers and mortgage bankers had every incentive to make the loans as they were paid generously no matter whether the loan later went into default or not.”

Even with the loss, the state investment fund remains strong, Whitmarsh said Wednesday.

The board manages investments for 17 retirement plans for public employees, teachers, law enforcement officers, firefighters and judges. The accounts comprise assets of $67.6 billion under management.

“We’ve got a lot of time to recover,” Whitmarsh said, speaking about the current recession. “This isn’t the first recession we’ve lived through. I think it takes being patient.”

The board, she said, will over the next few months review its asset allocation plan.

Need a 1 cent stamp?

Well the folks at Can Do Real Estate Group have got you covered -- at least if you are on their mailing list.

The real estate team, part of Windermere West in Federal Way, sent out 400 to 500 letters this month to people they consider their "A-plus" clients notifying people that postage went up 2 cents.

The mailing included 10 cents worth of stamps "so you don't have to make that last minute trip to the post office."

And a note reminding people to think of them for real estate needs.

"We appreciate them and we hope they appreciate what we provide for them," said real estate agent Cheryl Crutcher. "We're trying to create the business and personal relationships that keeps our business going and hopefully gives them something of value in return."

Crutcher said her real estate group has been doing monthly mailings to its clients -- including everything from stamps to lottery tickets to calendars -- for almost 10 years.

They can be silly such as forget-me-not flowers or helpful such as articles on how to protect your home from burglars.

The extra touch may be working.

Crutcher said her team just added a new person and plans on adding another later this year.

"We are growing by leaps and bounds," she said.

First quarter expense cuts have paid off for the Port of Tacoma.

The port's operating income -- or profit made from the business it does and not including money earned from the tax levy -- was up 3.3 percent to $4.8 million as of the end of April when compared to what the port forecast in its 2009 budget.

That number is still 26 percent below where the port was last year at this time.

The port made several cuts to its expenses earlier this year including delaying pay raises, reducing benefits and cutting travel to combat declining revenue brought on by the global recession.

Port revenue as of April was down almost 9 percent to $30.3 million when compared to what was budgeted and the previous year.

The port commission will hear a budget report at its meeting Thursday.

Such cuts translated to a 10 percent reduction in operating expenses from what the organization had originally budgeted and a 4 percent reduction when compared to the previous year.

But the biggest – and most painful – cut came Monday when the port notified 47 of its 256 employees that their jobs had been eliminated. Cost savings from the staff reduction aren’t reflected in the port’s current budget numbers.

A few have questioned why the port is doing layoffs at all, especially after hearing that port’s return on revenue remains above 15 percent.

The return on revenue – the port’s operating income or profit divided by its total revenues - is one metric the port uses to measure its financial health and indicates the port’s ability to stay profitable.

Port Executive Director Tim Farrell said Wednesday that there’s a difference between being able to “retain employees and having work for them to do.”

The current downturn in trade means the port doesn’t have enough work for all of its current employees – and won’t for awhile, he said.

The number of containers coming through the port was down 16 percent as of April when compared to the previous year. And at the end of last year container volume at the port remained 10 percent below its peak in 2006, when the port handled more than 2 million containers.

The port earns its money through a combination of rent from its shipping terminals and services such as moving containers on and off of trains.

Farrell said Wednesday that he doesn’t anticipate container volumes to get back to those peak levels for eight or nine years.

Issaquah's Costco Wholesale Corp. got an upgrade from a Credit Suisse analyst today, and the stock responded with a 3.33 percent price increase.

Analyst Michael Exstein said in his note to investors that Costco's in-store traffic is at "historically high levels."

If the economy begins reviving, the wholesale retailer could profit as customers begin buying more discretionary goods, he said.

Even if the recession remains with the country, Costco should be able to hold its own with prices at stable levels, he said.

Exstein improved his rating for Costco from "neutral" to "outperform."

Costco closed at $48.78 Wednesday, up $1.57.

Meanwhile, another local company, Tacoma's TrueBlue Inc., didn't profit from an analyst's upbeat remarks.

Temporary labor provider TrueBlue's stock fell 2.31 percent Wednesday.

That's in spite of generally favorable comments by Deutsche Bank analyst Paul Ginocchio regarding temporary labor companies such as Milwaukee's Manpower Inc. and TrueBlue.

Ginocchio said that rising overtime by factory workers and a boost in average workweek hours is a sign favorable for temporary staffing companies.

Both Manpower and TrueBlue, he said, are in a good position to see their demand for workers rise as the economy revives.

TRA Medical Imaging of Tacoma has acquired Olympia-based Northwest Radiology Group, LLC, effective June 1, 2009.

The main office of Northwest Radiology Group is located at 500 Lilly Road N.E., in the Memorial Medical Plaza. Under the agreement, Northwest Radiology Group’s owner, Randall Patten, M.D. and staff will become TRA employees, according to a recent release by TRA.

"The physicians and staff of Northwest Radiology Group have created a trustworthy and valued radiology practice with a reputation for caring staff and experienced radiologists," said Michael T. Dowd, M.D., TRA president.

"In order to continue serving our patients with excellent care and state-of-the-art technology we felt the time was right to partner with TRA Medical Imaging," said Randall M. Patten, M.D., Northwest Radiology owner.
Founded in 1943, TRA Medical Imaging is a local partnership of board certified radiology physicians who operate outpatient medical imaging clinics and provide diagnostic imaging, interventional radiology and neurointerventional surgical services within the Franciscan Health System and MultiCare Health System.

TRA’s outpatient medical imaging clinics are in the Tacoma, Lakewood and Gig Harbor, according to the release.

Founded in 2004, Northwest Radiology Group serves patients and clinicians in the Olympia area.

Laurette Koellner, a retired Boeing Co. senior vice president, may soon find herself on the board of one of the recession's billboard companies, American International Group Inc.

Koellner, who retired from a career at Boeing last year, is one of six people nominated to join the insurance giant's board.

Shareholders will vote on those nominees at AIG's June 30 annual meeting.

AIG has found itself in the congressional spotlight in recent months after the federal government invested billions in the company to keep it afloat.

AIG insured many of the subprime mortgage instruments that crashed in value when the housing market collapsed.

Koellner served as president of Boeng's international division for two years before her retirement and previously had led the company's Connexion airborne Internet operation.

AIG is replacing six of its nine board members at the behest of federal officials who want the board majority to be independent of the company.

Koellner also serves on the board of food maker Sara Lee.

What with 100 years having passed since the first race at the Indianapolis Motor Speedway, and what with the 93rd running of the Indy 500 just days away – and what with the American automobile industry facing a race of its own these days – the U.S. Census Bureau has put together some numbers of interest:

• 4.7 million – Number of adults who attended an auto racing event once a month or more in 2007.
• 743 – Number of U.S. automobile manufacturers in 1909.
• 85,000 – Number of people employed in auto manufacturing in the U.S. in 1909.
• 223,000 – Number of people employed in 2007.
• $680 – Average annual wages in automobile manufacturing in 1909.
• $29.23 – Average hourly wage in 2007.
• 11,260,000 – Motor vehicles produced in the U.S. in 2006 (39 percent were passenger cars).
• 17,771 – Ford Model T’s manufactured in 1909.
• 14,606 – Buicks manufactured in 1909.
• 312,000 – Motor vehicles registered in the U.S. in 1909 (98 percent were cars).
• 244,166,000 – Motor vehicles registered in the U.S. in 2006 (55 percent were cars).
• 52,172 – Number of automobile dealers in the U.S. in 2006.
• 1.3 million – Employees at U.S. dealerships.
• $55 billion – Annual payroll at U.S. dealerships.
• $1,280 – Average price of a new car in the U.S. in 1909.
• $28,715 – Average price in 2009.
• 6 cents – Average price of a gallon of gas in the U.S. in 1909.
• $2.31 – Average price this week.