April 30, 2008
Schiffrin Barroway Topaz & Kessler, LLP and Labaton Sucharow LLP Filed a Class Action Lawsuit Against Lehman Brothers Holdings Inc.
NEW YORK (April 30, 2008) – Schiffrin Barroway Topaz & Kessler, LLP and Labaton Sucharow LLP filed a class action lawsuit on April 29, 2008 in the United States District Court for the Northern District of Illinois, on behalf of purchasers of the securities of Lehman Brothers Holdings Inc. (“Lehman Brothers” or the “Company”) between September 13, 2006 and July 30, 2007, inclusive (the “Class Period”). The complaint names Lehman Brothers, Richard S. Fuld, Christopher M. O’Meara, and Joseph M. Gregory as defendants (collectively, “Defendants”). The complaint alleges that during the Class Period, Defendants violated the Securities Exchange Act of 1934 by issuing various materially false and misleading statements about Lehman Brothers’ financial well-being, business operations and prospects, which had the effect of artificially inflating the market price of the Company’s securities.
Notice is hereby given that in light of the voluntary dismissal and termination of Reese v. O’Meara, No. 1:08-cv-01119 (N.D. Ill. filed Feb. 22, 2008), the action filed yesterday is now the first-filed action against defendants. Accordingly, Lead Plaintiff papers must be filed with the court no later than 60 days from this notice, or June 30, 2008.
If you are a member of this class you can view a copy of the complaint and join this class action online at http://www.labaton.com/en/cases/Newly-Filed-Cases.cfm
The complaint alleges, inter alia, that Defendants failed to fully disclose the nature and extent of the Company’s exposure to losses incurred from trading in subprime mortgage-backed derivatives and that the Company failed to timely writedown its positions in these securities. On July 10, 2007, Lehman Brothers announced that it had “unrealized” losses of $459 million in the quarter ended May 31, 2007 from mortgages and mortgage-backed assets in its inventory. On the same day, it was reported that Standard & Poor’s indicated that it may cut ratings on $12 billion of bonds backed by subprime mortgages, a move that would significantly cut into the Company’s trading profits, since it is Wall Street’s largest underwriter of mortgage bonds. As a result of the news, Lehman Brothers’ stock fell $3.76 per share on July 10, 2007 on unusually high trading volume. Throughout the remainder of the Class Period, Lehman Brothers continued to downplay the risks associated with owning these mortgage-backed securities, and the nature and true extent of the Company’s exposure to subprime-related assets and financial positions. On July 26, 2007, it was reported by Bloomberg that the risk of owning Lehman Brothers’ bonds “soared” and its share price plunged “as concerns escalated that investment banks will be hurt by losses from subprime mortgages and corporate debt.” The report detailed the soaring cost of credit-default swaps used to bet on Lehman Brothers’ creditworthiness, signaling a significant deterioration in investor confidence. On this news, Lehman Brothers’ shares fell an additional $3.16 per share on July 26, 2007, again on unusually heavy trading volume. Finally, on July 31, 2007, Bloomberg reported that “… Lehman Brothers [is] as good as junk” because the prices of credit-default swaps for the Company equated to a Ba1 rating, implying that the Company’s credit ratings were below investment grade. On this news, the Company’s shares fell an additional $2.80 on heavy trading volume.
Plaintiff is represented by the law firms Schiffrin Barroway Topaz & Kessler, LLP and Labaton Sucharow LLP. Schiffrin Barroway and Labaton Sucharow are two of the country’s premier national law firms that represent individual and institutional investors in class action and complex securities litigation.
If you bought Lehman Brothers securities between September 13, 2006 and July 30, 2007, inclusive, you may qualify to serve as Lead Plaintiff. Lead Plaintiff papers must be filed with the court no later than June 30, 2008. If you would like to consider serving as lead plaintiff or have any questions about the lawsuit, please contact one of our representatives of Labaton Sucharow at 800-321-0476, or Darren J. Check, Esq. of Schiffrin Barroway at 888-299-7706.