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Case Status:    SETTLED
On or around 12/10/2012 (Date of order of final judgment)

Filing Date: April 05, 2005

A press release dated September 15, 2008 stated that a hearing has yet to be set in connection with a motion appealing the dismissal of a purported class action lawsuit entitled "In re MBIA Inc. Securities Litigation, Case No. 05- 3514," which was filed in the U.S. District Court for the Southern District of New York.

According to a press release dated February 14, 2007, a federal judge has dismissed a shareholder lawsuit against insurer MBIA Inc. and six former or current executives over alleged financial misstatements as a result of its treatment of certain reinsurance agreements in 1998. In an order issued Tuesday and made public Wednesday, U.S. District Judge Louis L. Stanton in Manhattan dismissed a consolidated complaint in the case, saying the claims were barred by the statute of limitations. The lead plaintiffs in the case, the Southwest Carpenters Pension Trust and the City of Pontiac General Employees' Retirement System, had alleged that MBIA improperly treated a series of transactions in 1998 as reinsurance agreements and the proceeds from those agreements as income, rather than as loans. The lawsuit had sought class-action status for purchasers of MBIA securities between Aug. 5, 2003, and March 30, 2005.

On July 27, 2005, the Court entered the Order consolidating several cases and designating 05cv3514 as the Lead Case. The institutional investors Southwest Carpenters Pension Trust and City of Pontiac General Employees' Retirement System were appointed as lead plaintiffs and their firm of choice, Lerach Coughlin Stoia Geller Rudman & Robbins LLP, was appointed as lead counsel for the class. On October 3, 2005, a Consolidated Amended Class Action Complaint was filed, and the defendants responded by filing motions to dismiss the Consolidated Amended Class Action Complaint on July 17, 2006.

The original complaint charges MBIA and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the Complaint allege sthat the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that MBIA, during the Class Period, overleveraged itself, deeply under-reserved against possible credit defaults, and overly exposed to guaranteeing risky structured financings; (2) that MBIA accelerated its recognition of current income, by classifying many of its upfront guarantee fees as advisory fees taken at closing, rather than as accounted for over the life of the bonds insured; (3) that MBIA improperly booked a $70 million payment received from Converium Re (then called Zurich Reinsurance North America) in 1998, which at the time was depicted as a loss-reducing reinsurance recovery for MBIA, but was, in substance, a loan; (4) that as a result of this, MBIA financial statements were materially overstated by $60million; (5) that MBIA artificially inflated premium income and portfolio credit quality by insuring bonds in the secondary market that were attracting prices lower than their stale credit ratings would dictate; (6) that MBIA's low loss ratios resulted from the Company's practice to defer recognizing problems rather than providing layers of excess collateral, other underwriting protection, and its self-proclaimed prowess at restructurings; (7) that MBIA set forth an illegal scheme of covering the loss, from the failed Allegheny Health, Education and Research Foundation ("AHERF") bond issuance, with a retroactive reinsurance policy, giving it a reinsurance recovery of $170million to cover the present value of the future AHERF interest and principal payments, which resulted in MBIA showing a better than 40% jump in pretax income that year -- $565 million over what the income figure would have been without resort to the reinsurance; (8) that MBIA was dumping on Channel Reinsurance Ltd., a Bermuda reinsurer where MBIA owns a 17.4% interest, performing but troubled policies from its existing portfolio, with the proviso that it could make up any quality problems later so that MBIA could buy time by getting potential workout loans off its balance sheet in order make its financial results appear better; and (9) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company.

The complaint further alleges that on or around November 18, 2004, MBIA issued a press release wherein it announced that "it received identical document subpoenas today from the Securities and Exchange Commission and the New York Attorney General's office requesting information with respect to non-traditional or loss mitigation insurance products developed, offered or sold by MBIA to third parties from January 1, 1998 to the present." On March 8, 2005, MBIA announced that it had decided to restate its financial statements for 1998 and subsequent years. The restatement was being made to correct the accounting treatment for two reinsurance agreements that MBIA entered into in 1998 with Converium Re (previously known as Zurich Reinsurance North America). Then on March 9, 2005, MBIA announced that it had received a subpoena from the U.S. Attorney's Office for the Southern District of New York seeking information related to the reinsurance agreements it entered into in connection with the loss it incurred in 1998 on bonds insured by MBIA Insurance Corp. that were issued by Allegheny Health, Education and Research Foundation ("AHERF"). On March 30, 2005, after the market closed, MBIA announced that it received additional requests from the New York Attorney General's Office (NYAG) and the Securities and Exchange Commission (SEC) that supplement the subpoenas it received in late 2004. On this news, shares of MBIA fell $4.36 per share, or 7.7 percent, to close at $52.28 per share on unusually heavy trading volume.

COMPANY INFORMATION:

Sector: Financial
Industry: Insurance (Prop. & Casualty)
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MBI
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 05-CV-03514
JUDGE: Hon. Louis L. Stanton
DATE FILED: 04/05/2005
CLASS PERIOD START: 08/05/2003
CLASS PERIOD END: 03/30/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abbey Gardy, LLP (New York)
    212 East 39th Street, Abbey Gardy, LLP (New York), NY 10016
    212.889.3700 · info@abbeygardy.com
  2. Glancy Binkow & Goldberg LLP (NY)
    1501 Broadway, Suite 1416, Glancy Binkow & Goldberg LLP (NY), NY 10036
    917.510.000 646.366-089 · info@glancylaw.com
  3. Law Offices of Brian M. Felgoise, P.C.
    Esquire at 261 Old York Road, Suite 423, Law Offices of Brian M. Felgoise, P.C., PA 19046
    215.886.1900 · securitiesfraud@comcast.net
  4. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  5. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    200 Broadhollow, Suite 406, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 · info@lerachlaw.com
  6. Lieff, Cabraser, Heimann & Bernstein LLP
    Embarcadero Center West 275 Battery Street, Suite 3000, Lieff, Cabraser, Heimann & Bernstein LLP, CA 94111-3339
    415.956.1000 415.956.1008 ·
  7. Milberg Weiss Bershad & Schulman LLP
    355 South Grand Avenue, Suite 4170, Milberg Weiss Bershad & Schulman LLP , CA 90071
    213.617.9007 213.617.9185 · info@milbergweiss.com
  8. Murray, Frank & Sailer LLP
    275 Madison Ave 34th Flr, Murray, Frank & Sailer LLP, NY 10016
    212.682.1818 212.682.1892 · email@murrayfrank.com
  9. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  10. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  11. Spector, Roseman & Kodroff (Philadelphia)
    1818 Market Street; Suite 2500, Spector, Roseman & Kodroff (Philadelphia), PA 19103
    215.496.0300 215.496.6610 · classaction@srk-law.com
  12. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 05-CV-03514
JUDGE: Hon. Louis L. Stanton
DATE FILED: 02/18/2009
CLASS PERIOD START: 08/05/2003
CLASS PERIOD END: 03/30/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    200 Broadhollow, Suite 406, Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 · info@csgrr.com/
  2. DeCarlo & Connor
    533 South Fremont Avenue, 9th Floor, DeCarlo & Connor, CA 90017-1706
    213.488.4100 213.488.4100 ·
  3. Milberg LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg LLP (New York), NY 10119
    1.877.692.1965 · ContactUs@milberg.com
No Document Title Filing Date
No Document Title Filing Date