In the latest eye-popping subprime-related securities class action lawsuit settlement, the parties to the National City Corporation securities class action lawsuit have agreed to settle the case for $168 million. The proposed settlement is subject to court approval. The August 8, 2011 press release of the New York Comptroller, acting on behalf of the New York State pension funds as lead plaintiff, can be found here.
The settlement papers are not yet available on PACER (indeed, that is the reason I waited for a day to publish a post about this settlement, in the hope that I might be able to run down copies of the papers. No luck so far - should I get my hands on them, I will post them to this site.) Jan Wolfe's August 9, 2011 Am Law Litigation Daily article describing the settlement can be found here.
As detailed here, this case arises out of the financial woes that beset Cleveland-based National City as its portfolio of subprime related mortgages nearly dragged the bank down. In their 249-page consolidated amended complaint (here), the plaintiffs alleged that as the residential real estate market began to collapse in 2007, the bank's residential mortgage and construction loan portfolio - which allegedly was of much lower quality than the bank had disclosed -- began to deteriorate much more rapidly than the company acknowledged publicly. The plaintiffs alleged further that the bank's failure to recognize this deterioration rendered the bank's financial statements and other disclosures materially misleading.
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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.
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