CINCINNATI - (Mealey's) Fifth Third Bancorp and a number of other defendants agreed to pay $16 million to settle claims that Fifth Third misrepresented its involvement in the subprime securities market in violation of federal securities laws, according to documents filed April 16 in Ohio federal court (The Eshe Fund v. Fifth Third Bancorp, No. 08-0421, S.D. Ohio).
(Motion for preliminary approval of settlement available. Document #88-130422-056B. Stipulation of settlement available. Document #88-130422-058B.)
Under the terms of the settlement, which are subject to court approval, Fifth Third, two of its subsidiaries, 18 of its current and former officers and directors and nine underwriters of Fifth Third stock offerings have agreed to settle the claims, although they each admit no wrongdoing.
Lead plaintiffs Local 295/Local 851 IBT Employer Group Pension Trust and Welfare Funds, District No. 9, I.A. of M. & A.W. Pension Trust and Edwin B. Shelton filed an amended complaint in the U.S. District Court for the Southern District of Ohio on behalf of all purchasers of Fifth Third common stock, Preferred B and C shares, from Oct. 19, 2007, to June 17, 2008, as well as on behalf of four sub-classes of investors.
The lead plaintiffs alleged that the defendants issued a series of false and misleading statements regarding their involvement in the subprime securities market in violation of Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934, Securities and Exchange Commission Rules 10b-5 and 14a-9 and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
The lead plaintiffs filed their amended complaint after Judge Sandra S. Beckwith issued an order on Aug. 10, 2010, dismissing a majority of the claims that dealt with Fifth Third's alleged misstatements regarding its involvement in the credit crisis.
The lead plaintiffs are represented by Jack Reise, Stephen R. Astley and Elizabeth A. Shonson of Robbins Geller Rudman & Dowd in Boca Raton, Fla.; Sherrie R/ Savett, Barbara A. Podell and Phyllis M. Parker of Berger & Montague in Phladelphia; Phyllis E. Brown of Cummins & Brown in Cincinnati; Daniel W. Krasner and Robert B. Weintraub of Wolf Haldenstein Adler Freeman & Herz in New York; and Michael R. Schmidt and Donald J. Rafferty of Cohen, Todd, Kite & Stanford in Cincinnati.
Fifth Third, its subsidiaries and officers are represented by James B. Burke, Joseph M. Callon Jr., Jennifer J. Morales, Danielle M. D'Addesa and Anthony M. Verticchio of Keating Muething & Klekamp in Cincinnati.
The director defendants are represented by Glenn V. Whitaker, Mary C. Henkel and Dorothea K. Langsam of Vorys, Sater, Seymour and Pease in Cincinnati.
The underwriter defendants are represented by Robert A. Pitcairn Jr. of Katz, Teller, Brant & Hild in Cincinnati.
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