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Case Status:    DISMISSED    
On or around 10/22/2009 (Court's order of dismissal)

Filing Date: October 16, 2006

According to an article dated March 19, 2008, a judge has dismissed a class action that alleged Legg Mason Inc. and Citigroup Inc. defrauded investors by omitting details of a secondary public offering following a multibillion-dollar unit swap in 2005. Judge Denny Chin of the U.S. District Court for the Southern District of New York said Monday that the plaintiffs had failed to state a claim and comply with pleading requirements in the consolidated amended complaint, which he dismissed with prejudice.

On January 12, 2007 all related cases were consolidated and lead plaintiffs and lead counsel were appointed. A consolidated complaint was filed on April 16, 2007 and the defendants moved to dismiss on June 15, 2007.

The original Complaint alleges that on 6/24/05, Legg Mason announced that it would swap its brokerage unit plus $2.1 billion in stock and cash for Citigroup's $435 billion money-management division and would buy hedge fund firm The Permal Group. Defendants stated the acquisition would be immediately accretive to earnings, have a positive effect on profitability and leave Legg Mason with a "Conservative Balance Sheet". Throughout the Class Period, defendants failed to disclose the following: (i) Legg Mason was unable to successfully integrate Citigroup's worldwide asset management business ("CAM") assets because of a lack of compatible corporate infrastructures; (ii) Citigroup had undisclosed pre-existing sales expenses to third-party brokers; (iii) post-acquisition cost "savings" were unattainable; (iv) Citigroup customers had withdrawn billions of dollars of assets; and (v) the Company's ability to achieve earnings growth was severely strained, due to deteriorating investment returns on Bill Miller's $18.7 billion Legg Mason Value Trust, the Company's flagship equity fund which was having its worse year since 1990.

The complaint further alleges that on or around July 25, 2006 the Company disclosed that the CAM acquisition costs were spiraling and customers were withdrawing funds, putting further pressure on revenues and margins and causing Legg Mason to miss the earnings targets for 1Q 07. On this news, stock price fell below $85 per share.

NOTE: The class action complaint was filed on behalf of all persons who purchased the common stock of Legg Mason, Inc. during the Class Period. Also included are those who acquired shares in a secondary offering on 3/9/06 or through the acquisitions of Permal or Worldwide Asset Management.

COMPANY INFORMATION:

Sector: Financial
Industry: Investment Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: LM
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 #: 06-CV-09436
JUDGE: Hon. P. Kevin Castel
DATE FILED: 10/16/2006
CLASS PERIOD START: 06/24/2005
CLASS PERIOD END: 07/24/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Law Offices of Alfred G. Yates
    519 Alleghany Bldg., 429 Forbes Avenue, Law Offices of Alfred G. Yates, PA 15219
    412.391.5164 ·
  2. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    58 South Service Road, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
  3. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 06-CV-09436
JUDGE: Hon. P. Kevin Castel
DATE FILED: 04/16/2007
CLASS PERIOD START: 02/01/2006
CLASS PERIOD END: 10/10/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. 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
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