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Case Status:    DISMISSED    
On or around 12/09/2009 (Stipulation and order of dismissal (voluntary dismissal))

Filing Date: March 19, 2008

According to a press release dated March 19, 2008, a class action lawsuit on behalf of persons who purchased Auction Rate Securities from Wachovia Corporation and Wachovia Securities, LLC, during the Class Period and who continued to hold such securities as of February 13, 2008.

Specifically, the Complaint alleges that Wachovia violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic “auctions.” Auction rate securities generally have long-term maturities or no maturity dates.

The Complaint alleges that, pursuant to uniform sales materials and top-down management directives, Wachovia offered and sold auction rate securities to the public as highly liquid cash-management vehicles and as suitable alternatives to money market mutual funds. According to the Complaint, holders of auction rate securities sold by Wachovia and other broker-dealers have been unable to liquidate their positions in these securities following the decision on February 13, 2008 of all major broker-dealers including Wachovia to “withdraw their support” for the periodic auctions at which the interest rates paid on auction rates securities are set.

The Complaint alleges that Wachovia failed to disclose the following material facts about the auction rate securities it sold to the class: (1) the auction rate securities were not cash alternatives, like money market funds, but were instead, complex, long-term financial instruments with 30 year maturity dates, or longer; (2) the auction rate securities were only liquid at the time of sale because Wachovia and other broker-dealers were artificially supporting and manipulating the auction rate market to maintain the appearance of liquidity and stability; (3) Wachovia and other broker-dealers routinely intervened in auctions for their own benefit, to set rates and prevent all-hold auctions and failed auctions; and (4) Wachovia continued to market auction rate securities as liquid investments after it had determined that it and other broker dealers were likely to withdraw their support for the periodic auctions and that a “freeze” of the market for auction rate securities would result.

On June 12, 2008, Judge Shira A. Scheindlin granted the motion to appoint Arthur Maxwell, Curlin Inc., Ralph Ohlers and Jackie Ohlers as Lead Plaintiff and appointed law firms of Girard Gibbs LLP and Stueve Siegal Hanson LLP as Co-Lead Counsel for the Class.

On October 10, 2008, the Multidistrict Litigation Panel denied the motion to transfer all the auction rate securities to MDL for centralization.

On December 8, 2009, the Lead Plaintiffs filed a Stipulation voluntarily dismissing the action without prejudice. That same day, Judge Shira A. Scheindlin signed the Stipulation and Order of Voluntary Dismissal. The action has been voluntarily dismissed without prejudice.


Sector: Financial
Industry: Money Center Banks
Headquarters: United States


Ticker Symbol: WB
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 #: 08-CV-02913
JUDGE: Hon. Shira A. Scheindlin
DATE FILED: 03/19/2008
CLASS PERIOD END: 02/13/2008
  1. Girard Gibbs LLP (San Francisco)
  2. Seeger Weiss LLP (New York)
  3. Stueve Siegel Hanson LLP
No Document Title Filing Date
—Reference Complaint Complaint Related Data is not available
—Related District Court Filings Data is not available