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Case ID: 4368 | Stocks | 08/02/2005
Between 1999 and 2004, hundreds of thousands of consumers and investors sought and paid for financial advice from American Express Financial Advisors (AEFA). Investors turned to these financial advisors because of their promises of informed, objective, personalized, and unbiased advice. Former AEFA clients allege that despite these promises, AEFA charted a course of business that defrauded and manipulated their fee-paying advisory clients, using the financial advisory segment of its immense sales organization to advance their interests, rather than the client's interests.
On August 1, 2005 American Express Financial Advisors (AEFA), a division of American Express, was served with a motion filed by leading Arizona plaintiff lawyers. The motion asked Federal Court in Arizona to certify a class of more than 500,000 former AEFA clients. The Motion for Class Certification is scheduled to be heard in Fall 2005. As of August 1, 2005, AEFA is known as Ameriprise Financial, Inc. In the class certification motion, the former clients allege that AEFA violated fiduciary duties and perpetrated a scheme to defraud its investing clients through the Company's sale of Financial Plans. The class certification motion argues that as AEFA continued its scheme, executives enriched themselves by creating incentive programs for financial advisors to sell American Express products, which created a direct conflict of interest that impaired the advisor's ability to render objective and unbiased advice. According to the Motion, this kind of scheme constitutes a breach of fiduciary duty under the federal regulation for investment advisors, the IAA. The IAA allows for rescission -- or money back -- for violations of the Act. This is not the first class action motion that AEFA has received. On February 17, 2005, the State of New Hampshire Bureau of Securities Regulation commenced an action, with similar charges; that case has now reached settlement. AEFA settled those claims by agreeing to pay a total of $7.5 million to the State of New Hampshire, with up to $2 million in restitution paid to individual purchasers of the Financial Plans residing in New Hampshire. 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 StockerYale, Inc. (NasdaqNM:STKR), certain of its officers and directors by stockholders who purchased the company's common stock between April 19, 2004 and November 09, 2004. 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. CASE DISMISSED: Several class actions were filed against venture capital organization TechHarvest Group, LLC, numerous affiliated companies, and certain of its officers and directors, on behalf of purchasers of membership interests in Harvest AirPrime, LLC; Harvest Storage Technology Group, LLC; and Woodcarvers Limited, LLC, between November 20, 1998, and December 31, 2003. The actions claim 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. On February 28, 2006, the United States District Court for the Central District of California entered an Order Dismissing Action and Entering Final Judgment in the Robert T. Harvey Securities Litigation. A class action has been filed against Internet security and Virtual Private Network solutions provider Check Point Software Technologies Ltd. (Nasdaq: CHKP) and certain of its officers and directors by stockholders who purchased the company's common stock between July 10, 2001, and April 4, 2002. The stockholders seek to recover compensatory damages for the loss of value of their stock. A class action has been filed against Par Pharmaceutical Companies, Inc. (PRX), certain of its officers and directors by stockholders who purchased the company's common stock between April 29, 2004 and July 5, 2006. 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. A class action has been filed against Viisage Technology, Inc. (NasdaqNM:VISG), certain of its officers and directors by stockholders who purchased the company's common stock between October 25, 2004 and March 02, 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. A class action has been filed against Great Wolf Resorts Inc. (WOLF), certain of its officers and directors by stockholders who purchased the company's common stock between December 14, 2004 and July 28, 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. |
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