BLB&G Obtains Final Court Approval for $627 Million Settlement in Wachovia
December 30, 2011
On December 30, 2011, the United States Southern District of New York granted final approval to the $627 million settlement reached between Co-Lead Plaintiffs, the Orange County Employees' Retirement System and Louisiana Sheriffs' Pension and Relief Fund, and all defendants in In re Wachovia Preferred Securities and Bond/Notes Litigation. Under the terms of the settlement, Wachovia and its affiliated entities (including certain former officers and directors, as well as various underwriters) have agreed to pay $590 million, while KPMG LLP, Wachovia's auditor, will pay $37 million to settle all claims.
This settlement was met with widespread media coverage regarding what is now the largest recovery obtained in a securities case arising from the subprime mortgage meltdown and subsequent global credit crisis. It is one of the 15 largest securities class action recoveries on record, and the largest settlement ever in a class action asserting only claims under the Securities Act of 1933. The case also represents one of the largest securities class action recoveries ever obtained where there were no parallel civil or criminal securities fraud actions brought by government authorities.
The case alleges that Wachovia provided offering materials that misrepresented and omitted material facts concerning the nature and quality of Wachovia's multi-billion dollar option-Arm (adjustable rate mortgage) "Pick-A-pay" mortgage loan portfolio, and that Wachovia violated Generally Accepted Accounting Principles ("GAAP") by publicly disclosing loan loss reserves that were materially inadequate at all relevant times. According to the Complaint, these undisclosed problems with the "Pick-A-Pay" mortgage loan portfolio threatened the viability of the financial institution, requiring it to be "bailed out" during the financial crisis before it was acquired by Wells Fargo & Company in 2008.
Also of Interest
ISS SCAS Releases Top Securities Settlements Report: Bernstein Litowitz Leads the Field for Ninth Consecutive Year
February 11, 2019
BLB&G Again Tops SCAS All-Time List With More Top Recoveries Than Any Other Firm
Historic Settlement Establishes Landmark Fox News Workplace Professionalism and Inclusion Council to Remedy Workplace Harassment Issues
November 20, 2017
Law360 Highlights BLB&G’s Top Ranking in Review of ISS/SCAS All-Time Top Settlements Report
June 14, 2017
BLB&G Named A Top Securities Practice by Law 360
BLB&G Leads SCAS All-Time List Scoring More Top Recoveries Than Any Other Firm
BLB&G #1 in the Nation with Most Dollars Recovered - ISS Securities Class Action Services 2018 Rankings
Chambers Ranks BLB&G Nation’s Top Securities Litigation Firm
Benchmark Once Again Names Six BLB&G “Litigation Stars”
Chambers Again Ranks BLB&G Among Nation’s Top Securities Litigation Firms