Conseco Common Stock Investors Win Class Status

Conseco Common Stock Investors Win Class Status - 3/20/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

Conseco Common Stock Investors Win Class Status
Samuel Howard

Securities Law 360. March 20, 2009
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EXCERPT: Former officers of Conseco Inc. accused of securities fraud got a jolt Friday as a federal judge granted class certification in the case, opening the door to plaintiffs potentially numbering in the thousands, though the class is limited to purchasers of Conseco’s common stock. Judge David F. Hamilton of the U.S. District Court for the Southern District of Indiana granted class status to two plaintiffs alleging the four former officers concealed Conseco’s dire condition from investors while the financial services giant was spiraling toward bankruptcy. The defendants — Gary C. Wendt, William J. Shea, Charles B. Chokel and James S. Adams — shared a vast amount of “negative information with the market” but persisted in deliberately misleading investors “by misrepresenting or failing to disclose how bad things were in eight critical aspects of the company’s finances and operations,” the plaintiffs said. The court certified a class of individuals or entities who purchased Conseco common stock during the period from April 24, 2001, through August 9, 2002, during which time the company was traded on the S&P 500 Index. The defendants contended that the market for Conseco common stock was not efficient enough to support a theory of fraud on the market, but Judge Hamilton deemed the Conseco shares’ presence on the New York Stock Exchange ample grounds for such accusations. The court likewise discounted defendants’ argument that both the defendants’ roles in the company’s decline and the plaintiffs’ claims were too diverse and individualized to be addressed through a class proceeding, according to the opinion. “Defendants make much of this possible series of events to highlight possible differences among class members. Many of these arguments involve different determinations of what an individual defendant did,” Judge Hamilton said.

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