NEW YORK (CNN/Money) - The New York State pension fund sued Merck & Co. Tuesday, claiming to have suffered huge financial losses from the scandal surrounding the drugmaker's Vioxx painkiller.

The $120 billion New York State Common Retirement Public Pension Fund, with more than 970,000 members, filed a class action lawsuit seeking to recover $171 million in losses attributed to the Vioxx withdrawal.

Merck announced Sept. 30 a worldwide recall of arthritis drug Vioxx after an ongoing trial confirmed the medication increased the risk of heart attacks and strokes. The company's stock price has since plunged 39 percent.

The New York pension fund, the country's second-largest after California's, is also seeking lead plaintiff status in class action, which means the fund and its law firm would manage the litigation on behalf of all investors who also lost money as a result of Merck's Vioxx woes.

The lawsuit is not the first shareholder case to be filed against Merck (Research) since the Vioxx crisis erupted. But under a 1995 federal law, investors who take big financial hits from a company's falling stock price can ask the court's permission to take the lead in shareholder litigation that follows.

According to Merck, more than 300 Vioxx-related lawsuits have so far been filed against the company, including 900 plaintiff groups that allege personal injuries resulting from the use of Vioxx.

New York State Comptroller Alan Hevesi, who filed the lawsuit on behalf of the state pension fund, claims the fund has lost substantial amounts of money because of Merck and its Vioxx medication.

Specifically, Hevesi alleges that the drugmaker had significant evidence, which it did not publicly disclose, that its arthritis drug Vioxx heightened the risk of cardiovascular complications, including heart attacks, strokes and death.

The lawsuit, filed in federal court in New Jersey, accuses Merck of violating federal securities laws resulting from Merck's failure to disclose material information concerning the safety of Vioxx.

"Merck must be held legally responsible for its actions," Hevesi said in a statement announcing the lawsuit. "Those actions have put lives at risk and cost shareholders billions of dollars."

Chris Loder, a Merck spokesman, said the company had not seen the lawsuit and could not comment on its specific allegations. However, he defended the company's actions with respect to its handling of Vioxx.

"Merck extensively studied Vioxx before seeking regulatory approval to market it," said Loder. "We promptly disclosed the clinical data about Vioxx and, when questions arose, we took additional steps, including conducting further prospective controlled studies to gain more clinical information about the medicine. When information from these additional trials became available, we acted promptly and made the decision to voluntarily withdraw Vioxx."