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Banks Face Another Mortgage Crisis
Securities Class Action | 2010/11/22 05:28

The potential liability facing bankers arises from the $2 trillion in subprime, alt-A and option-adjustable rate mortgages that they underwrote and sold to investors, mostly as mortgage-backed securities during the home-lending boom of 2005 to 2007. The losses on the mortgages will be horrendous before the dust settles—over $700 billion on these and other so-called nonagency mortgage securities, according to New York mortgage-research specialist and broker Amherst Securities Group.

And now investors—from the federal housing giants Fannie Mae (NYSE: FNMA.OB - News) and Freddie Mac (NYSE: FMCC.OB - News) to major bond managers like closely held Pacific Investment Management and BlackRock (NYSE: BLK - News) —are fighting back. They are seeking to put back the mortgages to the banks from whence the investment flotsam came and force the banks to eat much of the mortgage losses.

The argument hinges on the arcane contract principle of representations and warranties, known as reps and warranties in legal jargon. Namely, did the mortgages go bad because of the unanticipated nationwide collapse in home prices (a so-called exogenous factor) or are the banks responsible for the mess because they "misrepresented" to the mortgage purchasers the shoddy quality of the mortgages they put in securities and pools?

lready some of the buyers have enjoyed a modicum of success in their putback efforts. Fannie Mae and Freddie Mac have managed to return over $13 billion in defective mortgages and are gearing up to do even more. Before it's all over, the banks may have to swallow more than $30 billion in losses from Freddie and Fannie putbacks alone, according to an estimate by the Washington, D.C., mortgage-research boutique Compass Point Research & Trading. That's because no bank in the mortgage business can afford to play hardball with secondary market behemoths like Fannie and Freddie, the government-sponsored enterprises (GSEs) that own or guarantee about half of all home mortgages in the U.S.




Milberg LLP Announces the Filing of a Securities Fraud Class Action Lawsuit
Securities Class Action | 2010/11/08 11:20

A class action lawsuit was filed in the United States District Court for the District of Vermont on behalf of purchasers of Green Mountain Coffee Roasters, Inc. securities during the period from July 28, 2010, to September 29, 2010.

The complaint alleges that Green Mountain and certain of its officers violated the Securities Exchange Act of 1934 by not disclosing improper revenue recognition practices.

On September 28, 2010, Green Mountain reported that the U.S. Securities and Exchange Commission's Division of Enforcement is conducting an investigation and seeking documents relating to certain revenue recognition practices and the Company's relationship with one of its fulfillment vendors. Additionally, Green Mountain announced that as of June 26, 2010, there is a cumulative $7.6 million overstatement of pre-tax income due to an accounting error.

In reaction to the news, Green Mountain shares fell 16.08% to close at $31.06 on September 29, 2010.

If you purchased Green Mountain securities during the Class Period, you may, no later than November 29, 2010, file a motion with the Court to appoint you lead plaintiff. A lead plaintiff is a representative party that directs the litigation, and will be the movant that the Court determines to have the largest financial interest in the litigation with claims typical of those of other class members and the ability to adequately represent the class. Your share in any recovery will not be enhanced by serving as a lead plaintiff. You do not need to move for lead plaintiff to recover as an absent class member. You may retain Milberg LLP, or other attorneys, for this action, but do not need to retain counsel to recover as an absent class member. The complaint in this action was not filed by Milberg.

Founded in 1965, Milberg has offices in New York, Los Angeles, Tampa, and Detroit. The Firm has litigated landmark cases and recovered billions for shareholders and consumers. Our website has additional information: (www.milberg.com).



The Law Office of Curtis V. Trinko LLP Announces Proposed Settlement of Class Action
Securities Class Action | 2010/11/08 11:18

Lead Counsel for the Class has announced, pursuant to an Order of the United States District Court for the Southern District of New York, that a hearing in the class action entitled Fogarazzo, et al. v. Lehman Brothers, Inc., et al., No. 03 Civ.5194 (SAS) will be held on January 31, 2011, at 4:30 p.m., before The Honorable Shira A. Scheindlin, at the Daniel Patrick Moynihan U.S. Courthouse, 500 Pearl Street, Courtroom 15C, New York, New York 10007, for the purpose of determining (1) whether the proposed Settlement of the claims against the Settling Defendants in the Action for the sum of $6,750,000 in cash should be approved by the Court as fair, reasonable, and adequate to Members of the Class; (2) whether, thereafter, this Action should be dismissed with prejudice as regards the Settling Defendants pursuant to the terms and conditions set forth in the Settlement Agreement dated as of August 23, 2010; (3) whether the proposed plan to distribute the Settlement proceeds (the "Plan of Allocation") is fair, reasonable, and adequate, and therefore should be approved; and (4) whether the application of Lead Counsel for the payment of attorneys' fees and expenses incurred in connection with the Settlement involving the Settling Defendants, and reimbursement of Lead Plaintiffs' reasonable costs and expenses (including lost wages) directly related to their representation of the Class should be approved.

If you purchased or otherwise acquired shares of RSL Communications, Inc. common stock between April 30, 1999 and December 29, 2000, your rights may be affected by this Settlement.  If you have not received a detailed Notice of Proposed Settlement of Class Action, Motion for Attorneys' Fees and Settlement Fairness Hearing ("Notice") and a copy of the Proof of Claim and Release, you may obtain copies by mail: RSL Communications Securities Litigation, c/o Berdon Claims Administration LLC. P.O. Box 9014, Jericho NY 11753-8914; by toll-free phone: 800-766-3330; by fax: 516-9831-0810; or you can download a copy at www.berdonclaims.com.  If you are a Class Member, in order to share in the distribution of the Net Settlement Fund, you must submit a Proof of Claim and Release postmarked no later than February 22, 2011, establishing that you are entitled to recovery.

PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING THIS NOTICE.  If you have any questions about the Settlement, you may contact Lead Counsel at: Curtis V. Trinko, Esq.; The Law Office of Curtis V. Trinko LLP; 16 West 46th Street, 7th Floor; New York, NY 10036; 212-490-9550; ctrinko@trinko.com; or go to the Claims Administrator's website: www.berdonclaims.com.



Johnson & Johnson Investigated by Goldfarb Branham LLP
Securities Class Action | 2010/11/01 10:23

Goldfarb Branham LLP is investigating potential shareholder claims against the officers and directors of Johnson & Johnson due to lack of internal controls that led to phantom recalls and several class action lawsuits. Johnson & Johnson investors are encouraged to contact the firm at 877-583-2855 or hlindley@goldfarbbranham.com to learn about their rights.

“A class action complaint alleges that defendants received numerous complaints that Tylenol products made in Puerto Rico had a ‘musty’ odor, but failed to conduct an adequate investigation or notify the Federal Drug Administration,” securities lawyer Hamilton Lindley said. “It also alleges that company executives failed to take corrective actions when foreign materials were found in a Pennsylvania manufacturing facility. Additionally, when defendants learned of problems with its Motrin drug, they sent contractors to stores to purchase the product instead of mentioning a recall.”

Goldfarb Branham LLP is investigating a derivative lawsuit against company officers and directors for allowing this to occur. Derivative lawsuits often lead to restored confidence in companies involved in financial scandal and a resulting increase in shareholder value. Concerned shareholders who still hold their shares are urged to contact attorney Hamilton Lindley at 877-583-2855 or hlindley@goldfarbbranham.com.



Bernstein Litowitz Berger & Grossmann LLP Announces Class Action
Securities Class Action | 2010/10/25 09:55

Bernstein Litowitz Berger & Grossmann LLP today announced that it filed a class action lawsuit in the United States District Court for the Northern District of Illinois on behalf of purchasers of PrivateBancorp, Inc.'s publicly traded common stock between November 2, 2007 and October 23, 2009, inclusive (the "Class Period"), and investors who purchased or otherwise acquired PrivateBancorp's common stock pursuant and/or traceable to registered public offerings conducted on or about June 4, 2008 and May 11, 2009. The case is captioned City of New Orleans Employees' Retirement System v. PrivateBancorp., Inc., No. 10-cv-6826 (N.D. Ill.).

The claims alleged in the complaint are asserted against PrivateBancorp, certain of its senior executives and directors, the underwriters of PrivateBancorp's 2008 and 2009 Offerings, and its independent auditor.

PrivateBancorp is a Chicago-based financial services company that concentrates on commercial banking and private banking for high-net worth individuals and families.

The action alleges that during the Class Period the defendants violated the federal securities laws by engaging in improper behavior and by issuing materially false and misleading statements regarding PrivateBancorp's business and financial results that harmed the Company's investors. Specifically, the complaint alleges that the defendants misrepresented the Company's Strategic Growth and Transformation Plan (the "Growth Plan") which led PrivateBancorp to generate hundreds of millions of dollars in commercial and industrial loans that were high risk, and that the Company misrepresented the quality of its residential loan portfolio, which was suffering severe deterioration. As a result of defendants' false statements, PrivateBancorp's stock traded at artificially inflated prices throughout the Class Period. While PrivateBancorp's stock was artificially inflated, the Company conducted two public offerings, resulting in hundreds of millions of dollars in net proceeds to the Company.

Prior to the start of trading on October 26, 2009, PrivateBancorp shocked investors by reporting third quarter 2009 earnings results that fell far short of expectations. Despite having written off in excess of $100 million in bad loans in January 2009, the Company revealed that it held almost $400 million in nonperforming loans as of the third quarter 2009. PrivateBancorp further disclosed that its elevated levels of nonperforming loans were originated under the Growth Plan. In response to the Company's October 26 disclosure, PrivateBancorp stock fell over 37%, dropping from $19.00 per share to $11.98. The action alleges claims under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").

If you wish to serve as lead plaintiff for the Class, you must move the Court no later than 60 days from today. Any member of the proposed class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.

The City of New Orleans Employees' Retirement System is represented by BLB&G, a firm of over 50 attorneys with offices in New York, California, and Louisiana. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Gerald H. Silk of BLB&G at 212-554-1400, or via e-mail at jerry@blbglaw.com. Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity. Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.




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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
 
 
 

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