Unfortunately the State of NC bought a load of Facebook stock at the IPO. I have no idea why - it seemed to me and to many others that this IPO was overpriced.
Now the State Treasurer is suing Facebook and the underwriters of the stock claiming that they were mislead.
I have a couple of observations on this:
First if the Pension Fund was indexed, we wouldn't have this issue. An indexed portfolio wouldn't be jumping into overpriced IPOs. I've argued before that indexing this and most pension funds is the way to go.
Second, there are questions being raised about potential conflicts of interest. I'm in no position to make judgments either way on this, except that I think that more transparency is always the best answer.