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Wachovia Corporation : Wachovia Capital Trust IX 6.375% Trust Preferred Securities Summary: On February 29, 2008, the case was removed from Supreme Court of the State of New York, County of Nassau, 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 the Company’s May 2007 offering of the Company’s 6.375% Trust Preferred Securities. This action asserts strict liability claims under the Securities Act of 1933 against Wachovia, its senior insiders, the Wachovia trust which issued the securities, and the investment banks which underwrote the May 2007 Offering.
Defendant Wachovia 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 is headquartered in Charlotte, North Carolina and has branch offices in the United State and around the globe.
Defendants consummated Wachovia’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’s 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.
INDUSTRY CLASSIFICATION:
SIC Code: 6021
Sector: Financial
Industry: Money Center Banks
| COMPANY/ISSUER NAME: | Wachovia Corporation |
| COMPANY/ISSUER TICKER: | WB |
| COMPANY WEBSITE: | http://www.wachovia.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Arlette Miller, et al. v. Wachovia Corporation, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Notice of Removal | |||
| Type: Notice | Date on the document: 02/29/2008 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 03/07/2008 | ||
| OTHER DOCUMENTS | |||
| Case Name and/or Number: | |||
| Type: | Date on the document: | ||
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