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Case Status:    SETTLED
On or around 07/23/2013 (Date of order of final judgment)

Filing Date: July 15, 2008

According to a law firm press release, a class action was filed alleging violations of the federal securities laws on behalf of purchasers of FCStone Group, Inc. The defendants include the Company and members of senior management. The suit is pending in the United States District Court for the Western District of Missouri.

As set forth in the Complaint the Company entered into an important hedge transaction (the "Hedge") which, for the first two quarters of fiscal 2008, generated net income to the Company of approximately $5 million. Most of this income was generated in the second quarter ended February 29, 2008. In a conference call on April 10, 2008, the Company concealed the true nature of the Hedge, by failing to reveal that should there develop a significant spread between the U.S.-based Fed Funds interest rate (the "Feds Funds Rate") and the London Inter-Bank Rate ("LIBOR"), the Hedge would decline in notional value. Based on what the market was told, the investing public viewed the hedge as simply one to protect the Company from falling interest rates, and not one which was crucially dependent upon the spread between the Fed Funds Rate and LIBOR not widening.

However, in the third quarter of 2008 a significant spread arose between the Fed Funds Rate and LIBOR. As a result, the Hedge was declining so swiftly in notional value that the Company sold the Hedge, which sale wiped out any Hedge based gains for the first two quarters of fiscal 2008.

On July 10, 2008, FCStone shocked the market by announcing third quarter earnings per share of 28 cents versus the expected 47 cents. Much of the deviation was due to the decline and sale of the Hedge. In addition, the Company announced previously unmentioned and significant bad debt expenses due to volatility in the cotton markets which had occurred in March. Nothing was said about this volatility and its adverse effects on the April 10, 2008 conference call. Upon revelation of this adverse news FCStone shares dropped over 41% wiping out over $300 million in shareholder value.

On July 20, 2009, an order was entered into the docket appointing Electrical Workers Pension Fund, Local 103, I.B.E.W. and Thomas Lucas as Lead Plaintiff and Coughlin Stoia Geller Rudman & Robbins LLP to serve as lead counsel. On September 25, 2009, the lead plaintiffs filed a Consolidated Complaint For Violation Of The Federal Securities Laws.

On November 16, 2010, a Memorandum and Order was issued by the Court Denying the Defendants’ motion to dismiss, allowing the Lead Plaintiffs to amend their complaint.

On February 10, 2012, the Court issued an Order granting in part and denying in part Plaintiffs' Motion to Certify Class. The Court also denied the Defendants' Motion to Strike.

On February 8, 2013, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on March 18. On April 4, the Court issued an amended order preliminarily approving the Settlement.

On July 23, 2013, the Court issued a Final Judgment approving the Settlement and ordered this case dismissed with prejudice. The Court also issued an Order approving the Plan of Allocation, and an Order awarding attorneys' fees and expenses.


Sector: Financial
Industry: Investment Services
Headquarters: United States


Ticker Symbol: FCSX
Company Market: NASDAQ
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: W.D. Missouri
DOCKET #: 08-CV-00514
JUDGE: Hon. John T. Maughmer
DATE FILED: 07/15/2008
CLASS PERIOD END: 07/09/2008
  1. Roy Jacobs & Associates (New York)
    350 Fifth Avenue Suite 3000 , Roy Jacobs & Associates (New York), NY 10118
No Document Title Filing Date
COURT: W.D. Missouri
DOCKET #: 08-CV-00514
JUDGE: Hon. John T. Maughmer
DATE FILED: 09/25/2009
CLASS PERIOD END: 02/24/2009
  1. Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 ·
  2. Dyer & Berens LLP (former)
    682 Grant Street, Dyer & Berens LLP (former), CO 80203-3507
    303.861.1764 303.861.1764 ·
  3. Holzer Holzer & Fistel, LLC (Atlanta)
    200 Ashford Center North, Suite 300, Holzer Holzer & Fistel, LLC (Atlanta), GA 30338
    770.392.0090 770.392.0090 ·
  4. Yonke & Pottenger, L.L.C.
    1100 Main Street, Suite 2450, Yonke & Pottenger, L.L.C., MO 64105
    816.221.6000 816.221.6400 ·
No Document Title Filing Date