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Case ID: 4225 | Stocks | 03/14/2005
A class action has been filed against Direct General Corporation (NasdaqNM:DRCT), a financial services holding company company and certain of its officers and directors by stockholders who purchased the company's common stock between August 11, 2003 and January 26, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
According to a press release dated January 31, 2005, a class action lawsuit has been filed on behalf of purchasers of the securities of Direct General Corp., seeking to pursue remedies under the Securities Exchange Act of 1934. The complaint alleges that Defendants issued, or caused to be issued, false and misleading statements to artificially inflate the value of Direct General Stock. Specifically, Defendants concealed from the investing public the negative effect a change in the Florida Personal Injury Protection scheme would have on the Company's business operations. The Company also failed to properly reserve for its insurance losses as a result of the change in the Florida statute. While the stock's value was just a few dollars from its Class Period high, and almost $15 from its current price, Defendants and other insiders sold over 3.3 million shares for net proceeds of $108 million. Further, on or around January 26, 2005, the Company admitted that its current reserves were inadequate and disclosed for the first time the substantial impact the revised Florida PIP Statute was having on its operations. If you bought Direct General Corporation securities between August 11, 2003 and January 26, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against Red Robin Gourmet Burgers, Inc. (RRGB), certain of its officers and directors by stockholders who purchased the company's common stock between November 8, 2004 and August 11, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. It may be time for greater government oversight of mutual fund companies. Several class actions have been filed against the Lord Abbett family of mutual funds (various stock symbols) and certain of the officers and directors both Lord Abbett & Company, LLC by investors who purchased Lord Abbett mutual funds between February 6, 1999, to November 17, 2003. The actions claim that the defendants violated federal securities laws by drawing upon the assets of the Lord Abbett Funds to pay brokers to aggressively push Lord Abbett Funds over other funds, and then concealing the payments from investors by disguising them as brokerage commissions. The parties have reached a $140 million settlement in an SEC administrative proceeding filed against mutual fund company Strong Capital Management Company and its owner, Richard Strong, on behalf of persons who own or owned mutual fund shares managed by the company. The settlement resolves security fraud charges involving improperly timed trading of mutual funds. Persons sold will take part in the settlement should contact the attorneys who prosecuted the case for more information.
Auditing firms that don’t report accounting errors are in trouble these days. A class action has been filed against law firm Ernst & Young, LLP, on behalf of NextCard, Inc. shareholders who purchased NextCard securities between April 19, 2000, and October 30, 2001. The shareholders allege that the law firm, acting as NextCard’s auditor, actively participated in a scheme to defraud them in violation of federal securities laws. Several class actions have been filed against Eaton Vance Corporation, Inc. (NYSE: EV), Eaton Vance Management, Boston Management and Research, Lloyd George Investment Management (B.V.I.) Limited, and Lloyd George Investment Management (Bermuda) Limited and certain individuals by investors who purchased the shares of Eaton Vance mutual funds between January 30, 1999, to November 17, 2003. The actions claim that the defendants violated federal securities laws by drawing upon the assets of the Eaton Vance Funds to pay brokers to aggressively push Eaton Vance Funds over other funds, and concealing those payments from investors by disguising them as brokerage commissions. The parties have reached a tentative $6.25 million settlement in several consolidated class actions filed against Berkshire Realty Company, Inc., (formerly NYSE:BRI) and certain of its officers and directors by stockholders who purchased the company's common stock between June 21, 1999, and October 15, 1999. The actions claim that the defendants violated federal securities laws by breaching their fiduciary duties when they engineered a going-private, cash-out merger transaction in 1996 and 1997. The court-order notice of settlement does not specify a claims deadline -- persons eligible to take part in the settlement should contact attorneys for the class as soon as possible. |
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