Case Page

 

Case Status:    SETTLED
On or around 10/27/2014 (Other)

Filing Date: December 15, 2008

According to a press release dated December 15, 2008, the Complaint charges American Capital and certain of its officers and directors with violations of the Securities Exchange Act of 1934. American Capital is an "alternative asset management company" that claims to be the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company had far greater exposure to disruptions in the credit markets than disclosed; (2) that the Company planned to retain capital gains from its investments rather than distributing them to shareholders; (3) that as a result, the Company would have to drastically alter its dividend policy; (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the foregoing, the Company's statements about its financial well-being, future business prospects and dividend payments were lacking in any reasonable basis when made.

Throughout the Class Period and most of the Company's history, investors were lured to invest in American Capital's stock due to its large and dependable dividend payments. During the Class Period, investors were repeatedly assured that such dividend payments would continue, and that the Company was in sound financial condition. However, on November 10, 2008, the Company shocked investors when it reported a quarterly loss, suspended dividends, and stated that it would retain capital gains from investments as opposed to distributing them to shareholders as previously stated.

Upon the release of this news, the Company's shares fell $5.90 per share, or 42.85 percent, to close on November 10, 2008 at $7.87 per share, on unusually heavy trading volume. As the market continued to absorb the Company's announcement, American Capital's shares continued to fall, and finally closed on November 12, 2008 at $6.03 per share.

On March 4, 2009, the judge entered an order approving the plaintiff's notice of voluntary dismissal without prejudice, and the case was closed. The action continued in a related action, Klugmann v. American Capital Ltd. et al, filed on January 2, 2009.

On August 13, 2009, Judge Peter J. Messitte granted the motion to appoint lead plaintiff and lead counsel. On November 6, 2009, the plaintiffs filed an amended complaint. The defendants responded by filing a motion to dismiss, which was denied without prejudice on June 15, 2010.

On February 22, 2012, the Court issued an Order preliminarily approving the proposed class settlement.

On June 12, 2012, the Court issued an Order. The Order certified the settlement class, approved the class action settlement and plan of allocation, awarded attorneys' fees and expenses, approved reimbursement of plaintiffs' expenses, and dismissed this action with prejudice.

COMPANY INFORMATION:

Sector: Financial
Industry: Misc. Financial Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ACAS
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: D. Maryland
DOCKET #: 08-CV-03372
JUDGE: Hon. Roger W Titus
DATE FILED: 12/15/2008
CLASS PERIOD START: 10/30/2007
CLASS PERIOD END: 11/07/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Barroway Topaz Kessler Meltzer & Check, LLP (Radnor)
    280 King of Prussia Road, Barroway Topaz Kessler Meltzer & Check, LLP (Radnor), PA 19087
    610.667.7706 610.667.7706 · info@btkmc.com
  2. Tydings & Rosenberg LLP
    100 East Pratt Street, Tydings & Rosenberg LLP, MD 21202
    410.752.9700 410.757.5460 · webmaster@tydingslaw.com
No Document Title Filing Date
COURT: D. Maryland
DOCKET #: 09-CV-00005
JUDGE: Hon. Roger W Titus
DATE FILED: 11/06/2009
CLASS PERIOD START: 10/31/2007
CLASS PERIOD END: 11/07/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Brower Piven (New York)
    488 Madison Avenue. Eighth Floor, Brower Piven (New York), NY 10022
    212.501.9000 212.501.0300 · info@browerpiven.com
  2. Izard Nobel LLP
    29 South Main Street, Suite 215, Izard Nobel LLP, CT 06107
    (860) 493-6292 (860) 493-6290 ·
No Document Title Filing Date
No Document Title Filing Date