“I have been informed that you have declined to join the lawsuit for two reasons. First, because STRS’s estimated losses of $5MM are too small and not worth pursuing, and, second, because you either agree with Target’s stated DEI, ESG and LGBTQ+ initiatives and/or do not believe that such initiatives should be actionable,” Yost said.
Ohio Attorney General Dave Yost has purportedly asked a teachers’ public pension fund to file a lawsuit against Target Corporation over its DEI policies and LGBTQ apparel.
According to The Columbus Dispatch, the attorney general’s office issued a letter to the State Teachers Retirement System on Friday. In it, Yost said that the fund lost as much $5 million in Target stock, due at least in part to policy-related boycotts and discontent.
Yost’s letter was broadly critical of the pension fund’s practices, saying that it refused multiple opportunities to participate in litigation against Target.
“I write today because of your unwillingness to entertain the opportunity to seek lead-plaintiff status in the securities class action brought against Target Corporation,” Yost wrote. “STRS has sustained $5MM in losses as a result of Target’s actions. As fiduciaries of STRS you are not in a position to reject the opportunity to recover this money on behalf of retired teachers.”
Yost’s letter contained obvious political undertones, with the attorney general accusing the pension fund of being sympathetic to Target’s social position and corporate practices.
“I have been informed that you have declined to join the lawsuit for two reasons. First, because STRS’s estimated losses of $5MM are too small and not worth pursuing, and, second, because you either agree with Target’s stated DEI, ESG and LGBTQ+ initiatives and/or do not believe that such initiatives should be actionable,” he said.
“While discharging your fiduciary duties of care and loyalty, you are obliged to act on STRS’s best interests. In doing so, you must avail yourself of all legitimate tools at your disposal. There is no doubt that the possibility of recouping losses improperly sustained due to corporate fraud and malfeasance through a securities class action is one of these tools, regardless of the amount to be recovered. For STRS’s members and retirees, ever dollar counts,” Yost said. “Albeit not as significant relative to the system’s overall multibillion dollar net worth, there is nothing small about a $5MM loss, let alone considering that STRS will not incur out-of-pocket costs to join and lead the class, as the proposed engagement is premised on a contingency fee agreement.”
“Moreover, and perhaps more concerning, deciding not to join the class action because of your position towards the underlying facts supporting the lawsuit is a violation of your fiduciary duties,” Yost said. “Specially in this case where Target’s DEI, ESG, and LGBTQ+ initiatives is the alleged conduct that gave rise to the violations of the Securities Exchange Act. The situation is AKIN to ESG driven investment strategies, which are barred by statute.”
The State Teachers Retirement System has yet to publicly comment on Yost’s recommendation.
Sources
Ohio AG Dave Yost wants state teachers’ pension fund to sue Target over DEI policies
Ohio AG Yost Slams Teachers’ Pension Fund for Shunning Target Lawsuit, Risking Retirees’ Future
U.S. Securities Class Action Litigation Against Target Corporation
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