A lawsuit was filed on behalf of all purchasers of American Depository Receipts (“ADRs”) of Société Générale (SocGen) (OTC:SCGLY - News), traded on the over the counter market, and all U.S. purchasers of SocGen’s shares on overseas exchanges during the Class Period. Specifically, the complaint charges that SocGen violated the Securities Exchange Act of 1934 by misleading investors regarding its activities and exposure in the subprime mortgage markets, and its lack of sufficient internal controls and failure to act on information it had regarding the highly irregular and unauthorized trades by its Delta One derivative trading desk, handled by junior trader Jerome Kerviel. The case also involves alleged insider trading by SocGen’s top U.S. executive and board member, Robert A. Day. Specifically, the complaint charges that during the Class Period SocGen: (1) made false and misleading statements and concealed material adverse information regarding SocGen’s exposure to subprime loans, collateralized debt obligations (“CDOs”) and SocGen’s internal controls; (2) touted SocGen’s conservative management, risk control, and expertise in risk analysis and structured finance, including CDO vehicles; (3) misled investors by announcing that it had “very little exposure” to the subprime segment; and (4) ignored or failed to act upon numerous alerts which should have led to the uncovering of Jerome Kerviel’s massive irregular trading activity from 2005 through early 2008.
The Complaint further alleges that the result of this fraudulent activity was that SocGen had to take write downs of close to $4 billion relating to the subprime market, and $7 billion in losses due to the highly risky and irregular trading by Kerviel, which caused a dramatic drop in share price and significant losses to investors.
On June 27, 2008, the Court entered the Order signed by U.S. District Judge Gerard E. Lynch consolidating three actions under In re Société Générale Securities Litigation, case number 08cv2495. At the same time, a motion to appoint lead plaintiffs and the approval of lead counsels was filed by several individuals. On August 12, 2008, U.S. District Judge Gerard E. Lynch granted the motion to appoint the Vermont Pension Investment Committee as lead plaintiff and approved lead plaintiff's selection of Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. Lead plaintiff shall file and serve its consolidated amended complaint no later than October 7, 2008.
On October 17, 2008, the lead plaintiff filed a First Amended and Consolidated Complaint. On December 18, 2008, the defendants filed motions to dismiss the First Amended and Consolidated Complaint. On January 8, 2010, a Second Amended Complaint was filed. On April 15, 2010, the defendants filed a motion to dismiss the Second Amended Complaint, and on September 29, 2010, the motion was granted. Judgment was entered on September 30, 2010, and the action has been dismissed with prejudice.