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Case ID: 5046 | Stocks | 07/17/2008
According to the complaint, as a direct result of the market learning of defendant's misrepresentations and omissions, the price of Lehman Brothers shares declined and plaintiff and the class suffered a loss on their investments in Lehman Brothers.
During the Class Period, Lehman Brothers was an active participant and heavily invested in the mortgage-backed securities markets. By July 17, 2007, news of further deterioration in the mortgage-backed securities market and rumors concerning Lehman Brothers' mortgage related losses reached a critical stage. That day, Bear Stearns, a competing investment bank, announced that its "Structured Enhanced Leverage Fund," due to heavy losses in its mortgage-related investments, would be returning no money to its investors, and that a second failed mortgage securities-based hedge fund would be able to return only a small portion of its clients' funds. This news sent shockwaves through the market, and led investors to suspect that Lehman Brothers was also concealing mortgage related losses on its balance sheet. On July 18, 2007, this speculation forced Lehman Brothers to reassure the market: a Company spokeswoman, Kerrie Cohen, said "[t]he rumors related to subprime [mortgage] exposure are unfounded." Despite the Company's assurances, on July 30, 2007 an article published by Market Watch noted on that day that Standard & Poor's Equity Group downgraded Lehman Brothers, to hold from buy, "citing the brokerage's exposure to leverage in its fixed-income business, widening credit spreads and slower mortgage origination and securitization volume for mortgages." This news shocked the market, causing Lehman Brothers' share price to drop over the next four trading days, to close on August 3, 2007, at $55.78 per share, a 14.56 percent drop from its closing price before the news of the Standard & Poor's downgrade.
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 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 business consulting and systems integration company BearingPoint, Inc. (NYSE: BE) and certain of its officers and directors by stockholders who purchased the company's common stock between October 30, 2002, and August 13, 2003. Several class actions have been filed against computer technology giant Hewlett-Packard Company (NYSE:HPQ) and certain of its officers and directors by stockholders who sold the company's common stock between September 4 and November 5, 2001. The actions claim that the defendants violated federal securities laws by failing to disclose Director Walter Hewlett's opposition to the 2001 merger with Compaq Computer Corporation, thereby artificially deflating the price of the company's securities. On May 08, 2008, a motion to consolidate cases was filed by the City of Livonia Employees' Retirement System and TETRA Technologies Inc. As a result, the Judge granted the motion to consolidate cases and entered its order at the same time.
On May 16, 2008, a motion to appoint an individual to serve as lead plaintiff and for approval of the selection of lead counsel was filed. A class action has been filed against restaurant operator Quality Dining, Inc., (Nasdaq:QDIN) and certain of its officers and directors by stockholders who were offered $2.75 per outstanding share when company officials made a June 2004 announcement of plans to take the company private. The actions claim that the defendants violated their fiduciary duties to stockholders by advancing their individual interests at the expense of public shareholders. |
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