Salomon Smith Barney, Inc. ("SSB" or the Company) is an investment bank.
The Plaintiff filed this action in the United States District Court for the District of Columbia, on behalf of himself and all other persons and entities who maintained Guided Portfolio Management (“GPM”) accounts with SSB during the class period. GPM accounts are discretionary accounts managed by SSB. Specifically, the Plaintiff alleges in essence that SSB’s equity ratings for stocks were improperly influenced by SSB’s desire to obtain or retain investment banking business from those companies whose stock was being rated by SSB. During the class period, SSB’s financial consultants could generally purchase for GPM accounts only equity securities that were favorably rated by SSB’s Research Department. Plaintiff alleges that as a result of SSB’s inappropriate and unwarranted ratings, SSB failed to deliver account management services based on objective research in accordance with SSB’s contractual and fiduciary duties. Plaintiff asserts causes of action for alleged violations of Section 206 of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-6, breaches of fiduciary duty, and breaches of contract, on behalf of all persons and entities who maintained GPM accounts during the class period.
As summarized by the same notice, on June 18, 2003, this action was transferred to the United States District Court for the Southern District of New York. On June 27, 2003, this action was reassigned to Judge Gerard E. Lynch, United States District Judge. On August 7, 2003, Defendant moved for an order dismissing the Complaint, which the Court denied on June 8, 2004. On January 28, 2005, Plaintiff moved for class certification. Briefing on this motion was completed on June 16, 2005. On October 19, 2005, the Court deemed the motion to have been withdrawn pending this Settlement, subject to reinstatement. On April 25, 2005, Defendant moved for judgment on the pleadings dismissing Plaintiff’s state-law claims as preempted by the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), Pub. L. No. 105-353, 112 Stat. 3227. Briefing on this motion was completed on June 16, 2005. On October 19, 2005, the Court deemed the motion to have been withdrawn pending this Settlement, subject to reinstatement.
By the Notice of Certification and Proposed Settlement of Class Action, dated March 13, 2006, the Settlement provides for a Settlement Fund consisting of fifty million dollars ($50,000,000.00) in cash, plus interest, less fees and costs. On May 12, 2006, a hearing was scheduled to determine whether the Settlement of the Action, as set forth in the Stipulation of Settlement dated January 20, 2006, is fair, reasonable and adequate, and to consider the proposed Plan of Allocation for the Settlement proceeds and the application of Plaintiff’s Counsel for an award of attorneys’ fees and reimbursement of expenses.
In a press release dated April 18, 2006, the Securities Arbitration Law Firm of Klayman & Toskes, P.A. ("K&T"), representing numerous high net-worth investors throughout the nation, advises all SSB n/k/a Citigroup Global Markets, Inc. customers who are eligible to participate in the Settlement of the Smith Barney Guided Portfolio Management Account Class Action (W. Caffey Norman, III, et al. v. Salomon Smith Barney, No. 03 Civ. 4391 (GEL)), that they have until April 21, 2006 to opt-out of the Class Action. K&T strongly encourages all customers who maintained a GPM account to consider securities arbitration as an alternative means to recovering their financial losses.
According to the docket, on May 19, 2006, the Court entered the Order signed by U.S. District Judge Gerard E. Lynch approving the Plan of Allocation. That same day, the Court further entered the Judgment approving the settlement and dismissing the action.
