National City Corporation Case 01/24/2008
NOVEMBER 2011 - According to the Notice:
Chief Judge Solomon Oliver, Jr. of the United States District Court for the Northern District of Ohio (the “Court”) has preliminarily approved a proposed settlement (the “Settlement”) of a class action lawsuit brought under the Securities Exchange Act of 1934 (“Exchange Act”) and the Securities Act of 1933 (“Securities Act”). The Settlement will provide $168,000,000 for the benefit of: (1) investors who purchased or otherwise acquired (“purchased”) the common stock of National City Corporation between April 30, 2007 and April 21, 2008, inclusive, and (2) a subclass of all persons who acquired National City common stock issued pursuant to a National City Registration Statement filed with the SEC in connection with National City’s acquisition of MAF on or about September 1, 2007.1 The Settlement also provides for payment of legal fees and expenses in an amount to be fixed by the Court. The Settlement is summarized below.
Defendants deny each and every one of Lead Plaintiff’s allegations of wrongdoing or liability. Defendants also deny that Lead Plaintiff or any Settlement Class Member suffered damages or that they were harmed in any way by the conduct alleged in the Amended Class Action Complaint (“Amended Complaint”).
The Court has scheduled a hearing for final approval of the Settlement, the Plan of Allocation and Lead Counsel’s application for attorneys’ fees and expenses. That hearing has been scheduled for Monday at 2:00 p.m. on March 19, 2012 in the courtroom of Chief Judge Solomon Oliver, Jr., United States District Court for the Northern District of Ohio, 801 W. Superior Avenue, Courtroom 19A, Cleveland, Ohio 44113.
Any objections to the Settlement, the Plan of Allocation, the application for attorneys’ fees and expenses and related matters must be filed with the Court and served in writing on Lead Counsel for the Settlement Class identified on page 14 of this Notice and on Defendants’ Counsel identified on page 14 of this Notice. The procedure for objecting to or excluding yourself from the Settlement is described below.
AUGUST 2011 - Proposed settlement of $168,000,000 for the complaint filed in U.S. District Court for the Northern District of Ohio in 2008. Allegedly, National City wasn't upfront about either the quality of its home equity loans and mortgages nor the severity of its losses. The settlement is to be presented in court in the next few weeks.
JANUARY 2008 - According to a press release dated January 24, 2008, the complaint charges National City and certain of its officers and directors with violations of the Securities Exchange Act of 1934. National City, a financial holding company, provides commercial and retail banking, mortgage financing and servicing, consumer finance, and asset management services in the United States
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results. As a result of defendants’ false statements, National City stock traded at artificially inflated prices during the Class Period, trading above $30 per share during much of the Class Period.
In October 2007, National City announced a big decline in earnings due to losses related to its mortgage business but assured the market about the dividend. Then, on January 2, 2008, the Company announced a 49% reduction in its quarterly dividend to $0.21 per share from $0.41 per share. On this news, National City’s stock dropped from $16.46 per share to as low as $15.45 per share, closing at $15.59 per share on January 2, 2008 on volume of over 12.7 million shares.
The true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) the subprime mortgages on the Company’s books were a much bigger risk to the Company’s financial position than represented; (b) the Company was failing to adequately reserve for mortgage-related exposure, causing its balance sheet and financial results to be artificially inflated; and (c) defendants had no reasonable basis to make favorable predictions about the Company’s future dividend payments and future financial performance given the problems in the business. As a result of defendants’ false statements and omissions, National City’s stock traded at artificially inflated prices during the Class Period.