Wachovia Corporation (NYSE: WB) Investor Securities Class Action Lawsuit 02/29/2008

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Company Name(s): 
Wachovia
Case Name: 
Wachovia Shareholder Class Action Lawsuit 02/29/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: WB
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
02/29/2008
Class Period Begin: 
07/31/2006
Class Period End: 
02/27/2009
Court of Filing: 
U.S. District Court for the Eastern District of New York
Deadline To File for Lead: 
04/29/2008
Date Settled: 
01/03/2012
Settlement Amount: 
$627,000,000
Deadline to Participate in Settlement: 
12/28/2011
Summary: 

January 2, 2014 - The court ordered the authorization of the distribution of the net settlement fund.

August 19, 2013 - Lead plaintiffs filed motion for approval of disbursement of funds.

January 4, 2012 - The court denied the defendant's motion for reconsideration.

January 3, 2012 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys' fees and expenses, and dismissed the action.

November 14, 2011 - The court held a final settlement hearing.

August 9, 2011 - The court preliminarily approved the settlement.

August 5, 2011 - Parties filed stipulation of settlement.

March 31, 2011 - The court granted, granted and denied in part, and denied various motions to dismiss and ordered the various cases closed.

March 14, 2011 - Defendant filed a motion for reconsideration.

July 14, 2010 - Defendants filed a motion to dismiss.

May 28, 2010 - The lead plaintiffs filed a second amended consolidated complaint.

November 3, 2009 - Defendants filed a motion to dismiss.

September 4, 2009 - The lead plaintiffs filed an amended consolidated complaint on behalf of investors who purchased WB common shares between July 31, 2006 and May 29, 2008. The lead plaintiff alleges that the defendants violated the Securities Act of 1933 by issuing false and misleading statements between July 31, 2006 and May 29, 2008.

July 15, 2009 - The court ordered the transfer of this case to the U.S. District Court for the Southern District of New York.

August 21, 2009 - Lead plaintiffs and lead counsel were appointed and all three related cases were consolidated.

January 26, 2009 - The court ordered the case dismissed.

January 21, 2009 - Another investor filed a complaint.

January 16, 2009 - Another investor filed a complaint.

January 16, 2009 - The plaintiff filed a notice of voluntary dismissal.

February 29, 2008 - The court ordered the transfer of this case to the U.S. District Court for the Eastern District of New York.

An investor in shares of Wachovia Corporation (formerly NYSE: WB) filed a lawsuit in the U.S. District Court for the Eastern District of New York against Wachovia Corporation over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made during Wachovia Corporation's May 2007 Offering. The case was removed from the Supreme Court of the State of New York, County of Nassau, and transferred to the U.S. District Court for the Eastern District of New York.

According to the complaint originally filed in the Supreme Court of the State of New York, County of Nassau, this is a securities class action on behalf of all persons who acquired the preferred stock of Wachovia Corporation pursuant and/or traceable to a false and misleading registration statement and prospectus issued in connection with Wachovia Corporation’s May 2007 offering of Wachovia Corporation’s 6.375% Trust Preferred Securities. This action asserts strict liability claims under the Securities Act of 1933 against Wachovia Corporation, its senior insiders, the Wachovia Corporation trust which issued the securities, and the investment banks which underwrote the May 2007 Offering.

Defendants consummated Wachovia Corporation’s Offering pursuant to the false and misleading Registration Statement, selling 30 million shares at $25 per share, for proceeds of approximately $750 million.

Wachovia ultimately announced huge charges associated with its mortgage portfolio, causing the price of Wachovia Corporation’s (NYSE: WB) common stock and the preferred securities issued in the Offering to decline.

The true facts which were omitted from the Registration Statement were: (a) Defendants’ portfolio of collateralized debt obligations (CDOs) contained billions of dollars worth of impaired and risky securities, many of which were backed by subprime mortgage loans; (b) Defendants failed to properly account for highly levered loans such as mortgage securities; and (c) Wachovia had been heavily involved in mortgages involving the pay-option adjustable rate mortgage (ARMs). These pay-option ARMs provided that, during the initial term of the loan, borrowers could pay only as much as they desired with any underpayment being added to the loan balance. These loans would become toxic (for both Wachovia and the borrowers) once house prices stopped increasing at a rapid rate.

Defendant Wachovia Corporation is registered as a financial holding company and a bank holding company, and provides commercial and retail banking and trust services through full-service banking offices. Wachovia Corporation is headquartered in Charlotte, North Carolina and has branch offices in the United States and around the globe.