The original Complaint alleges that Defendants violated the federal securities laws by issuing analyst reports regarding Metromedia that recommended the purchase of Metromedia common stock and which set price targets for Metromedia common stock, without any reasonable factual basis. The complaint further alleges that, when issuing its Metromedia analyst reports, Defendants failed to disclose significant, material conflicts of interest which it had, in light of Defendants' Metromedia reports, to obtain investment banking business for Defendant Salomon Smith Barney ("Salomon"). Furthermore, in issuing Metromedia reports, in which it recommended the purchase of Metromedia common stock, Defendants failed to disclose material, non-public, adverse information which they possessed about Metromedia. Throughout the Class Period, Defendants maintained a "BUY" recommendation on Metromedia in order to obtain and support lucrative financial deals for Salomon. The Class Period begins on November 25, 1997 the date when Salomon "initiated coverage" of and issued their first report on Metromedia. The Class Period ends on July 25, 2001, the date Defendants belatedly downgraded Metromedia from a "Buy" to a "Neutral."
By the Order dated January 28, 2003, the Court: (i) appointed plaintiffs Techgains Corporation and the Metromedia Plaintiffs Group as Lead Plaintiffs; and (ii) appointed Kaplan Fox & Kilsheimer LLP, Nix, Patterson & Roach, LLP and Patton, Haltom, Roberts, McWilliams & Greer, LLP, as Co-Lead Counsel.
On October 15, 2003, Lead Plaintiffs filed an Amended Class Action Complaint (the "Complaint") on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of MFN during the Class Period alleging that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. On December 30, 2003, Defendants moved to dismiss the Complaint.
On January 5, 2005, this Court issued an order granting in part and denying in part Defendants' motion to dismiss. On June 20, 2006, this Court certified the class of plaintiffs. Thereafter, Defendants filed a Rule 23(f) appeal of the class certification decision. On September 30, 2008, the United States Court of Appeals for the Second Circuit issued an opinion, in In re Salomon Analyst Metromedia Litigation, Docket No. 06-cv-3225, 2008 U.S. App. LEXIS 20570 (2nd Cir. Sept. 30, 2008) vacating this Court's order granting class certification and remanding the case for further proceedings. Following arms-length negotiations between Co-Lead Counsel and Defendants, the parties have agreed to a settlement of the Action.
On November 19, 2008, Judge Gerard E. Lynch preliminarily approved the proposed $35,000,000 settlement. The settlement hearing was set for February 27, 2009. At the hearing, Judge Lynch approved the final settlement and dismissed the action with prejudice. Lead Counsel was awarded attorneys' fees of 27% of the settlement fund and awarded $989,296.11 as reimbursement of their out-of-pocket expenses.
