Misleading mortgage-backed securities investments offered by Bear Stearns allegedly “directly smacked” the Oregon Public Employees’ Retirement Fund with more than $17 million in losses following the 2008 economic collapse, state officials said in a suit Monday.

In the Nov. 1 filing, Oregon Treasurer Ted Wheeler and Attorney General John Kroger explained in the new litigation that now defunct Bear Stearns, and a subsidiary Structured Asset Mortgage Investments II, Inc., caused “profound financial harm” to state assets with the bundled real estate obligations investment product.

Between 2006 and 2007, OPERF purchased a total of 57,755,000 different certificates valued a $1 each. At the time of the drop, values nose-dived by more than a half, the filing stated. 

“We believe that these junk investments were intentionally mislabeled and all Oregonians are still reeling from the economic fallout,” Wheeler said in the Monday announcement. "If you hurt Oregonians financially, we are coming after you.”

Kroger added that the state “has zero tolerance for companies that deceive investors.”

With this legal push, the state joins an existing class of public employees’ retirement funds in Iowa and Mississippi, the New Jersey Carpenters' Health Fund, the Boilermaker Blacksmith National Pension Trust, the City of Fort Lauderdale Police & Fire Retirement System and the Police and Fire Retirement System of the City of Detroit.

This previous filing, which is still pending in the U.S. District Court in the Southern District of New York, pertains to the plaintiffs’ pooled purchase of more than $17.5 billion in mortgage-backed certificates two years prior to the crash. The lawsuit explained that while the investments were pegged as “high-quality “investment grade” securities,” they were actually “made up of risk subprime” commitments, the announcement said today.

As of press time, inquiries placed to JP Morgan seeking comment were not immediately returned. The New York-based conglomerate purchased Bear Stearns when it was on the heels of filing for bankruptcy in 2008.

Presently, OPERF is worth roughly $54 billion and is “diversified and invested around the worth.” The state Treasury Department, which manages its assets, “engages with corporations to encourage responsible practices and also takes legal action when companies fail to act in shareholders’ best interest,” the press release said.