The Fourth Circuit delivered a lump of coal right before Christmas to a Wachovia shareholder whose 100,000 shares of the Bank's stock, once worth about $5.6 million, sank into near worthlessness when Wachovia failed. The case, decided December 23rd, is Rivers v. Wachovia Corp., [an enhanced version of this opinion is available to lexis.com subscribers] and it affirms the dismissal of all of Rivers' claims.
Rivers sued Wachovia and its top officers and directors for misrepresenting the Bank's financial condition in the months leading up to its failure in 2008. He said that he would have sold his shares but for the positive statements made by the Bank about its soundness and stability, which he said amounted to fraud.
Judge Wilkinson said that although Rivers sought to cast his claims as belonging personally to him (i.e. "individual"), they were in fact derivative claims (which belonged to the corporation).
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Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.
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