SALEM, Ore. (AP) - Oregon will lead a national class-action lawsuit against internet and TV provider CenturyLink over allegations including fraudulent accounts and billing.
The designation is the latest development since the 2017 filing of the lawsuit, which alleged the company pushed employees to secretly add services and charges to customer accounts. When the allegations came to light, CenturyLink stock declined sharply in value.
A federal judge confirmed that the troubled Oregon Public Employees Retirement Fund would be the lead plaintiff in the case. The Oregon treasurer and attorney general announced the development Tuesday, saying the state had suffered $6 million in losses after the stock dive.
Losses from the alleged actions are part of larger challenges facing state pension planners, as increasing pension bills have driven some municipalities into dire budgetary straits.
Leading on corporate accountability: Oregon chosen to lead national securities lawsuit against CenturyLink, in the wake of account fraud
Oregon Treasury files lawsuits when bad corporate actors impair the long-term value of trust fund investments
SALEM – Oregon Treasurer Tobias Read and Oregon Attorney General Ellen Rosenblum today announced that Oregon will lead the national securities class action lawsuit against CenturyLink Inc. in the wake of widespread customer abuses including the creation of fake accounts and millions of dollars in fraudulent billing.
The company is alleged to have engaged in widespread customer abuses, including the creation of fake accounts and millions of dollars in fraudulent billing
A federal judge in Minnesota confirmed the Oregon Public Employees Retirement Fund as lead plaintiff in the case. A major shareholder, the Oregon pension fund is suing to recoup losses experienced due to the company’s actions.
“The message here is pretty simple: Don’t defraud your customers and shareholders,” said State Treasurer Tobias Read, who authorized the case on behalf of the pension fund. “If corporate misbehavior undermines the sustainability of public trust funds, Oregon will demand accountability on behalf of taxpayers, schools, communities and public employees.”
The State Treasurer is the state custodian of funds and a member of the Oregon Investment Council, which sets investment policy for Treasury-managed trust funds including the pension fund.
“Every year, telecommunications issues make our list of consumers’ top complaints. Oregonians want to know that when they sign up for cable or internet, the company providing these services will be honest and reliable,” said Attorney General Rosenblum. “And, when a company in Oregon does engage in fraudulent behavior, consumers expect us to hold its management and directors accountable.”
The initial lawsuit was filed in 2017 after revelations the company urged employees to add services and lines to customer accounts without obtaining the necessary clearance, leading to millions of dollars in unauthorized charges.
Disclosure of the company’s actions caused the value of CenturyLink shares to nosedive. Losses to Oregon public trust funds as a direct result of the fraud and subsequent disclosure are estimated to be $6 million, depending on when stock values are computed.
According to the class action, CenturyLink’s revenue contained ill-gotten gains that were unsustainable. In addition, the conduct will likely subject CenturyLink to heightened regulatory scrutiny; therefore, the company’s reports to shareholders and the public were false and misleading.
As a lead plaintiff in the case, Oregon will set legal strategy and spearhead settlement negotiations. Oregon also will have the opportunity to press for new management practices that prevent future customer abuse and enhance the company’s long-term value.
As of Dec. 31, 2017, the Oregon Public Employees Retirement Fund held 694,731 shares of CenturyLink, with a total value of $11.6 million.
As a responsible shareholder, Oregon Treasury engages with corporations and regulatory entities in pursuit of sustainable long-term performance and corporate accountability. The advocacy, led by corporate governance director Jennifer J. Peet, includes proxy votes at annual meetings, direct engagement with executives, and securities lawsuits to recoup losses. Lawsuits are filed in concert with the Oregon Attorney General.
The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs like the Oregon 529 Savings Network and OregonSaves. Treasury oversees public investment, banking, and debt management services. State investment policies are set by the Oregon Investment Council. Treasury also promotes public outreach and education to help Oregonians learn strategies to save money and make smart financial choices.
The Oregon Department of Justice is led by Attorney General Ellen Rosenblum, and serves as the state’s law firm. The Oregon DOJ advocates for and protects all Oregonians, especially the most vulnerable, such as children and seniors. The Oregon DOJ has nine divisions, ranging from Criminal Justice to Child Support.