/raid1/www/Hosts/bankrupt/CAR

/raid1/www/Hosts/bankrupt/CAR_Public/090408.mbx C L A S S A C T I O N R E P O R T E R Wednesday, April 8, 2009, Vol. 11, No. 69 Headlines AMERICAN AIRLINES: FlyersRights.org Dismayed at "Ray" Decision BRITISH AIRWAYS: N.Y. Court Denies Motion in Lost Luggage Case CVS CAREMARK: Consolidated Pharmacies' Antitrust Lawsuit Pending CVS CAREMARK: Continues to Face Ala. Suits Over 1999 Settlement GASOLINE RETAILERS: APA Joins Price-Fixing Litigation in Quebec GOOGLE INC: Group Calls on DOJ to Intervene in Book Settlement KANSAS CITY: Continues to Face Policyholders' Litigation LOUISIANA-PACIFIC: Settlement of OSB Antitrust Suit Paid in 2008 MERRILL LYNCH: Reaches $75M Settlement for 401(k) Litigation STIFEL FINANCIAL: To Defend ARS-Related Suit Pending in Missouri TAKE-TWO INTERACTIVE: Settles Delaware Suit Over EA Buyout Offer TYCO INT'L: N.M. Judge Issues ERISA-Related Ruling in Fraud Suit VANGUARD GROUP: N.Y. Judge Nixes Suit Over Illegal Investments WAHSINGTON MUTUAL: N.Y. Judge Halts Consumer Fraud Litigation WELLS FARGO: Affiliates Still Face Civil Lawsuits Over ARS Sale WELLS FARGO: Continues to Defend Interchange Litigation in N.Y. WELLS FARGO: "Lipetz" Securities Suit v. Wachovia Corp. Pending WELLS FARGO: Municipalities' Suits Over Bid Practices Pending WELLS FARGO: Settlement of RICO Suits v. Wachovia Okayed in Jan. WELLS FARGO: Wachovia Faces 3 Suits Over Issuance of Securities WELLS FARGO: Wachovia Faces 7 Suits Claiming ERISA Violations XCEL ENERGY: Awaits Minn. Supreme Court Ruling on Hoffman Appeal XCEL ENERGY: Comer Appeal Still Under Advisement in 5th Circuit XCEL ENERGY: Deal in Texas-Ohio Energy Case Reached in Jan. 2009 New Securities Fraud Cases DEUTSCHE BANK: Howard G. Smith Announces Securities Suit Filing MORGAN STANLEY: Bernstein Litowitz Files Securities Fraud Suit REGIONS FINANCING: Izard Nobel Announces Securities Suit Filing ********* AMERICAN AIRLINES: FlyersRights.org Dismayed at "Ray" Decision --------------------------------------------------------------- FlyersRights.org, on April 6, 2009, expressed disappointment over the federal district judge's dismissal of a class action lawsuit filed by Cathy Ray of Fayette, Ark., who brought suit for unlawful imprisonment for 9 1/2 hours by American Airlines on a flight in Austin, Texas, on December 29, 2006. The suit is captioned, "Ray v. American Airlines, Inc. Case No. 5:2008-cv-05025." In his April 2nd decision, U.S. district Judge Robert T. Dawson of the Western District of Arkansas wrote that the court was "sympathetic to the plaintiff," but ultimately ruled that the airline has no duty to provide passengers with "a stress- free environment." He found that the named plaintiff had never personally "told the pilots or the flight attendants that she wanted to deplane" so there was no "willful detention." "The Arkansas judge also found that these stranding situations are not controlled by Federal regulations. So Congress must legislate airline passengers' rights so that individual judges can look to uniform rules when making rulings in future cases rather than making up standards that are not connected to reality on a case-by-case basis," said Ms. Hanni. "This decision only reinforces the need for Federal legislation to create a 'bright line' standard for how long passengers can be kept on stranded flights," said Kate Hanni, director of FlyersRights.org. Congress did not enact passengers rights legislation last year but new legislation (H.R. 915, S. 213) is moving forward this year. FlyersRights.org is the leading national organization fighting for a Airline Passengers' Bill of Rights, including a "bright line" standard which would give passengers an option to deplane after being stranded for three hours if the pilot determined it were safe to do so. "Fighting for a 'Three Hour Option' remains our top priority," said Hanni. "We are hopeful that Congress will decide that people need no longer be held against their will for an unlimited amount of time on stranded aircraft by the airlines." For more details, contact: Kate Hanni (kate@flyersrights.org) FlyersRights.org Phone: 1-877-FLYERS6 or 707-337-0328 Web site: http://www.flyersrights.org/ BRITISH AIRWAYS: N.Y. Court Denies Motion in Lost Luggage Case ---------------------------------------------------------------- British Airways (LON:BAY) passengers attempting to hold the airline accountable for losing an estimated one million pieces of luggage received some good news when a District Court judge ruled a nationwide class action lawsuit could move forward in the United States court system. The ruling, issued by Judge Nicholas Garaufis of the U.S. District Court for the Eastern District of New York, denied British Airways' motion to dismiss the consumer class action, filed in 2007, which seeks to recover travelers' actual losses rather than a $1,500 cap the airline uses to limit damages. The Court noted, and rejected "BA's extreme position" that it was not responsible for actual losses for lost baggage unless its mishandling rate was "worse than fifty percent." According to the suit, originally filed in Federal Court in Seattle, British Air lost 23 bags per 1,000 passengers carried, about 60 percent more than the industry average and twice as bad as the worst U.S. carrier. International airlines typically cap liability for lost luggage, citing The Montreal Convention, to which the United States and 124 other countries are signatories. That agreement limits liability to $1,500 per passenger, but also waives that limit if the airline acted recklessly, and with knowledge that damage would probably result. "The judge's ruling puts international airline carriers on notice that they cannot hide behind the Montreal Convention to deny passengers the care and respect to which they are entitled," said Steve Berman, managing partner of Hagens Berman Sobol Shapiro and the attorney representing passengers. "This ruling affirms that the convention protects passengers from airlines that demonstrate they don't care about passengers' luggage." "Since we filed the complaint in September 2007, we have been inundated with calls and e-mails from passengers who experienced horrific treatment by British Air, in the way the airline dealt with baggage, and how they dealt with passengers searching for luggage," Berman continued. Media reports cite huge piles of lost luggage from British Airways flights piled on London's Heathrow airport tarmac subjected to rain, and was otherwise misrouted and mistreated. The suit also claims that despite an internal April 2007 report that the British Airlines overloaded its baggage-handling system by nearly 25 percent, it failed to alert passengers to the increasing complications posed by its flawed system. Additional reports indicate that the airline's backlog of lost passenger baggage reached 20,000 pieces by March 2007, the complaint states. The amended complaint goes on to cite that British Air workers claim that in reality the backlog neared 40,000 bags at that time. The suit seeks to represent American passengers who flew internationally on British Air and who had luggage lost, damaged or delayed between September 5, 2005 and September 5, 2007. For more details, contact: Hagens Berman Sobol Shapiro 1301 Fifth Avenue, Suite 2900 Seattle, WA 98101 Phone: (206) 623-7292 Fax: (206) 623-0594 Web site: http://www.hbsslaw.com/ CVS CAREMARK: Consolidated Pharmacies' Antitrust Lawsuit Pending ---------------------------------------------------------------- CVS Caremark Corp. and certain of its subsidiaries continue to face a consolidated action styled "In Re Pharmacy Benefit Managers Antitrust Litigation," alleging antitrust violations. Various lawsuits have been filed alleging that Caremark and its subsidiaries Caremark Inc. (now known as Caremark, L.L.C.) and AdvancePCS (now known as CaremarkPCS, L.L.C.) have violated applicable antitrust laws in establishing and maintaining retail pharmacy networks for client health plans. Pennsylvania Litigation In August 2003, Bellevue Drug Co., Robert Schreiber, Inc. d/b/a Burns Pharmacy and Rehn-Huerbinger Drug Co. d/b/a Parkway Drugs #4, together with Pharmacy Freedom Fund and the National Community Pharmacists Association filed a putative class action against AdvancePCS in Pennsylvania federal court, seeking treble damages and injunctive relief. The claims were initially sent to arbitration based on contract terms between the pharmacies and AdvancePCS. Alabama Litigation In October 2003, two independent pharmacies, North Jackson Pharmacy, Inc. and C&C, Inc. d/b/a Big C Discount Drugs, Inc. filed a putative class action complaint in Alabama federal court against Caremark, Caremark Inc., AdvancePCS (acquired by Caremark in March 2004 and now known as CaremarkPCS, L.L.C.) and two prescription benefit management (PBM) competitors, seeking treble damages and injunctive relief. The case against Caremark and Caremark Inc. was transferred to Illinois federal court, and the AdvancePCS case was sent to arbitration based on contract terms between the pharmacies and AdvancePCS. The arbitration was then stayed by the parties pending developments in Caremark's court case. Consolidated Action In August 2006, the Bellevue case and the North Jackson Pharmacy case were transferred to Pennsylvania federal court by the Judicial Panel on Multidistrict Litigation for coordinated and consolidated proceedings with other cases before the panel, including cases against other PBMs. Caremark has appealed a decision which vacated the order compelling arbitration and staying the proceedings in the Bellevue case to the Third Circuit Court of Appeals. Motions for class certification in the coordinated cases within the multidistrict litigation, including the North Jackson Pharmacy case, remain pending. The consolidated action is now known as the "In Re Pharmacy Benefit Managers Antitrust Litigation." CVS Caremark Corp. -- http://www.cvs.com/-- is a provider of prescriptions and related healthcare services in the U.S. The company fills or manages more than one billion prescriptions annually. CVS CAREMARK: Continues to Face Ala. Suits Over 1999 Settlement --------------------------------------------------------------- CVS Caremark Corp. continues to face putative class-action suits in Alabama, relating to a 1999 settlement of various securities class action and derivative lawsuits against Caremark and other defendants. The company was named in a putative class action lawsuit filed in October 2003, in Alabama state court by John Lauriello, purportedly on behalf of participants in the 1999 settlement. Other defendants include insurance companies that provided coverage to Caremark with respect to the settled lawsuits. The Lauriello lawsuit seeks approximately $3.2 billion in compensatory damages plus other non-specified damages based on allegations that the amount of insurance coverage available for the settled lawsuits was misrepresented and suppressed. A similar lawsuit was filed in November 2003, by Frank McArthur, also in Alabama state court, naming as defendants Caremark, several insurance companies, attorneys and law firms involved in the 1999 settlement. This lawsuit was stayed as a later-filed class action, but McArthur was subsequently allowed to intervene in the Lauriello action. In February 2008, the Lauriello trial court proceedings were stayed pending an appeal by McArthur of certain rulings relating to his complaint in intervention. In September 2008, the Alabama Supreme Court entered judgment on the appeal and in December 2008, the trial court lifted its stay and returned the case to its active docket, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. CVS Caremark Corp. -- http://www.cvs.com/-- is a provider of prescriptions and related healthcare services in the U.S. The company fills or manages more than one billion prescriptions annually. GASOLINE RETAILERS: APA Joins Price-Fixing Litigation in Quebec --------------------------------------------------------------- Mr. Simon Jacques of Quebec City, Mr. Marcel Lafontaine of Victoriaville and the Automobile Protection Association (APA) will appear before the Honourable Justice Dominique Belanger of the Quebec Superior Court to obtain authorization to proceed together in the class action filed earlier over price fixing in gasoline retailing in Quebec. The plaintiffs wish to obtain authorization to represent residents throughout Quebec in an action against oil companies and the officers involved in gas price fixing. This cartel came to light in the summer of 2008 when the federal Competition Bureau brought criminal charges in this matter against 13 individuals and 11 corporations in the province of Quebec. To date, 6 individuals and 3 corporations have pleaded guilty. The penalties assessed against the parties who pleaded guilty to date total more than 2.6 million dollars, and jail time totals 44 months. Among the defendants targeted by the APA's motion to amend are Ultramar, Esso, Shell, Couche-Tard, Canadian Tire, Provigo, Irving, Olco and La Coop Federee which operates the Sonic gas station chain. APA President George Iny stated that the penalties imposed under the Competition Act are a small percentage of the profits made by the cartel, and that the current Act does not provide an effective means of restitution for consumers of gasoline � both important reasons for APA's involvement in the case. The hearing at the Quebec City Courthouse, 300 boul. Jean- Lesage, Quebec, was scheduled to begin on the morning of April 6, 2009. GOOGLE INC: Group Calls on DOJ to Intervene in Book Settlement -------------------------------------------------------------- Google, Inc.'s proposed settlement with authors and publishers raises antitrust concerns, Consumer Watchdog said on April 6, 2009, and the nonpartisan, nonprofit group called on the U.S. Department of Justice to intervene. In a letter to Attorney General Eric Holder and other Justice officials Consumer Watchdog asked the department to seek a delay of the settlement until a "most favored nation" clause favoring Google is removed and the deal's "orphan works" provision is extended to cover all who might digitize books, not only Google. "This settlement was negotiated by the parties in the suit and there has been no opportunity to represent and protect the broad interests of all consumers," said John M. Simpson, a consumer advocate with Consumer Watchdog. "This deal simply furthers the relatively narrow agenda of Google, The Authors Guild and the Association of American Publishers." Read the letter here: http://researcharchives.com/t/s?3b1d. The proposed settlement announced last year creates the nonprofit Book Rights Registry to manage book digital rights issues. Here are the deal's two most troubling aspects, Consumer Watchdog said: -- A "most favored nation" clause guarantees Google the same terms that any future competitor might be offered. Under the most favored nation clause the registry would be prevented from offering more advantageous terms to, for example, Yahoo! or Microsoft, even if it thought better terms would be necessary to enable either to enter into the digital books business and provide competition to Google. It is inappropriate for the resolution of a class action lawsuit to effectively create an "anti-compete" clause, which precludes smaller competitors from entering a market. Given the dominance of Google over the digital book market, it would no doubt take more advantageous terms to allow another smaller competitor to enter the market. -- The settlement provides a mechanism for Google to deal with "orphan works." Orphan works are works under copyright, but with the rights holders unknown or not found. The danger of using such works is that a rights holder will emerge after the book has been exploited and demand substantial infringement penalties. The proposed settlement protects Google from such potentially damaging exposure, but provides no protection for others. This effectively is a barrier for competitors to enter the digital book business. The most favored nation provision should be eliminated to remove barriers of entry and the orphan works provision should be extended to cover all who digitize books, Consumer Watchdog said. The settlement is the result of a class action suit brought against Google by The Authors Guild and The Association of American Publishers. Members of the class have until May 5 to file objections. A federal judge will review the settlement in June. Consumer Watchdog -- Http://www.consumerwatchdog.org -- formerly the Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan organization with offices in Washington, DC and Santa Monica, Ca. KANSAS CITY: Continues to Face Policyholders' Litigation ------------------------------------------------------------- Kansas City Life Insurance Co. is still facing litigation pursued on behalf of purported classes of policyholders, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. The life insurance industry, including the company, has been subject to an increase in litigation in recent years. Such litigation has been pursued on behalf of purported classes of policyholders and other claims and legal actions in jurisdictions where juries often award punitive damages, which are grossly disproportionate to actual damages. No specific details regarding the litigation were disclosed in the company's latest Annual Report dated Feb. 27, 2009. Kansas City Life Insurance Co. -- http://www.kclife.com/-- is a financial services company. the company operates in the life insurance sector of the financial services industry in the United States. KCL primarily consists of three life insurance companies: Kansas City Life Insurance Company (Kansas City Life) the parent company, and wholly owned subsidiaries Sunset Life Insurance Company of America (Sunset Life) and Old American Insurance Company (Old American). LOUISIANA-PACIFIC: Settlement of OSB Antitrust Suit Paid in 2008 ---------------------------------------------------------------- Louisiana-Pacific Corp.'s settlement of a purported class-action suit, captioned "In re OSB Antitrust Litigation, Case No. 2:06- cv-00826-PD," was paid in 2008. Initially, the company was named as one of a number of defendants in multiple class action complaints filed on or after Feb. 26, 2006, before the U.S. District Court for the Eastern District of Pennsylvania. These complaints were dismissed or consolidated into two complaints under one caption, "In Re OSB Anti-Trust Litigation, Master File No. 06-CV-00826 (PD)." The first complaint is a consolidated amended class action complaint filed on March 31, 2006, on behalf of plaintiffs who directly purchased OSB (oriented strand board) from the defendants from May 1, 2002, through the date the complaint was filed (the direct purchaser complaint). The second complaint is a consolidated amended class action complaint, filed on June 15, 2006, on behalf of plaintiffs who indirectly purchased OSB from the defendants from May 1, 2002, through the date the complaint was filed (the indirect purchaser complaint). The plaintiffs in both amended and consolidated complaints moved for and received class certification and sought treble damages totaling approximately $4.8 billion alleged to have resulted from a conspiracy among the defendants to fix, raise, maintain and stabilize the prices at which OSB is sold in the U.S., in violation of Section 1 of the Sherman Act, 15 U.S.C. Section 1. The plaintiffs in the indirect purchaser complaint also seek similar remedies under individual state anti-trust and competition laws as well as consumer protection laws. The company said that it believes that the claims asserted were without merit, but after being ordered to settlement conference by the judge in the cases, LP decided that in order to limit the risks and costs associated with a prolonged trial schedule, it would settle the direct and indirect lawsuits. These settlements were accrued and paid in 2008, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. The suit is "In Re OSB Antitrust Litigation, Master File No. 06- CV-00826 (PD)," filed in the U.S. District Court for the Eastern District of Pennsylvania, Judge Paul S. Diamond, presiding. Representing the plaintiffs are: William P. Butterfield, Esq. (wbutterfield@cmht.com) Cohen, Milstein, Hausfeld & Toll 1100 New York Avenue, N.W. West Tower, Suite 500 Washington, DC 20005 Phone: 202-408-4600 - and Jeffrey J. Corrigan, Esq. (jcorrigan@srk-law.com) Spector Roseman and Kodroff 1818 Market Street, Suite 2500 Philadelphia, PA 19103 Phone: 215-496-0300 Representing the defendants are: Barack S. Echols, Esq. (bechols@kirkland.com) James Howard Mutchnik, Esq. (jmutchnik@kirkland.com) James H. Schink, Esq. Kirkland & Ellis, LLP 200 East Randolph Drive, Suite 7500 Chicago, IL 60601 Phone: 312-861-3144 312-861-2350 - and - Sherry A. Swirsky, Esq. (sswirsky@schnader.com) Schnader Harrison Segal & Lewis, LLP 1600 Market St., Ste. 3600 Philadelphia, PA 19103 Phone: 215-751-2000 Fax: 215-972-7475 MERRILL LYNCH: Reaches $75M Settlement for 401(k) Litigation ------------------------------------------------------------ Merrill Lynch & Co. Inc. reached a $75 million preliminary settlement with participants in its 401(k) to cover losses sustained in their retirement plans over the last several years, Mark Bruno of InvestmentNews reports. Cohen Milstein Sellers & Toll PLLC of Washington, along with Keller Rohrback LLP of Seattle, announced the proposed settlement on April 6, 2009, according to InvestmentNews. Marc Machiz, Esq. an attorney with Cohen Milstein, who is representing Merrill workers in the class-action lawsuit, added that a federal court will hold a hearing at the end of July to determine if the payment will be approved. He told InvestmentNews that the class notice will be going out later this week to Merrill workers who participated in the company�s 401(k), retirement accumulation plan, or stock ownership plan between Sept. 30, 2006 and Dec. 31, 2008. During that time period, the value of Merrill's stock declined by more than 80%. InvestmentNews reported that the class-action suit was initiated by participants in November 2007 to recoup some of the losses they incurred for investing a portion of their retirement savings in Merrill stock. It alleged that the company should have known that its stock was an imprudent investment option for its plan participants. STIFEL FINANCIAL: To Defend ARS-Related Suit Pending in Missouri ---------------------------------------------------------------- Stifel Financial Corp. intends to defend all claims asserted in a purported class action civil lawsuit filed in the U.S. District Court for the Eastern District of Missouri. The civil lawsuit was filed on Aug. 8, 2008, seeking class- action status for investors who purchased and continue to hold auction rate securities (ARS) offered for sale between June 11, 2003 and Feb. 13, 2008, the date when most auctions began to fail and the auction market froze. The suit alleges misrepresentation about the investment characteristics of ARS and the auction markets, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Stifel Financial Corp. -- http://www.stifel.com/-- is a financial services holding company. The company provides securities related financial services through its wholly owned subsidiaries, Stifel Nicolaus & Company, a retail and institutional brokerage and investment banking firm; Century Securities Associates, Inc. (CSA), an independent contractor broker-dealer firm; Stifel Nicolaus Limited (SN Ltd), the Company's international subsidiary, and Stifel Bank & Trust, a retail and commercial bank. The company operates in five segments: Private Client Group, Equity Capital Markets, Fixed Income Capital Markets, Stifel Bank and Other. TAKE-TWO INTERACTIVE: Settles Delaware Suit Over EA Buyout Offer ---------------------------------------------------------------- Take-Two Interactive Software Inc. entered into an agreement to settle a shareholder lawsuit related to a failed buyout offer from videogame company Electronic Arts, Inc., Chad Clinton of Dow Jones reports. The settlement doesn't provide for a payment of monetary damages to the plaintiff or the purported class. The company said it plans to oppose any application by the plaintiff's counsel for fees and expenses and expects any award of fees or expenses will be covered by its existing insurance policies, according to the Dow Jones report. On March 7, 2008, Patrick Solomon, a stockholder of the company, filed a purported class-action complaint with the Court of Chancery of the State of Delaware against the company and certain of its officers and directors (Class Action Reporter, Oct. 15, 2008). The plaintiff contends that the defendants breached their fiduciary duties by, among other things, allegedly refusing to explore premium offers by Electronic Arts, Inc., to acquire all of the company's shares, enacting a bylaw amendment allegedly designed to entrench the current board by preventing stockholders from nominating and electing alternative directors, agreeing to an amendment to a management agreement with ZelnickMedia and issuing a proxy statement for the 2008 Annual Meeting that allegedly contains misleading and incomplete information. The complaint seeks preliminary and permanent injunctive relief, rescissory and other equitable relief and damages. The plaintiff immediately moved for preliminary injunctive relief, and the parties engaged in expedited discovery proceedings. However, several of the claims have been addressed by the company's voluntary actions in issuing a supplemental proxy statement, rescinding the notice by-law amendment, granting additional time for any present or former stockholders to nominate directors or propose business, and extending the annual meeting date. After the company took such measures, the plaintiff agreed to withdraw his motion for preliminary injunctive relief, and the annual meeting went forward without difficulty (and without any stockholders nominating directors or proposing business). Discovery on the remaining claims is ongoing, according to the company's Sept. 5, 2008 Form 10-Q Filing with the U.S. Securities and Exchange Commission for the quarter ended July 31, 2008. New York-based Take-Two Interactive Software, Inc. -- http://www.take2games.com/-- is a global publisher, developer and distributor of interactive entertainment software, hardware and accessories. The company operates in two segments: publishing and distribution. The publishing segment consists of Rockstar Games, 2K Games, 2K Sports and 2K Play publishing labels. The company develops, markets and publishes software titles for gaming and entertainment hardware platforms, including Sony's PLAYSTATION3 and PlayStation2 computer entertainment systems; Sony's PSP (PlayStationPortable) system; Microsoft's Xbox 360 and Xbox video game and entertainment systems; Nintendo's Wii, GameCube, DS and Game Boy Advance, and for the personal computers and Games for Windows. The company's distribution segment, which includes its Jack of All Games subsidiary, distributes its products, as well as software, hardware and accessories produced by others to retail outlets in North America. TYCO INT'L: N.M. Judge Issues ERISA-Related Ruling in Fraud Suit ---------------------------------------------------------------- Judge Paul Barbadoro of the U.S. District Court for the District of New Hampshire ruled that Tyco International Ltd. can't rely on an Employee Retirement Income Security Act provision that shields fiduciaries against liabilities from retirement plan losses stemming from beneficiaries' control over their assets, in a class-action lawsuit that is part of multidistrict litigation alleging a massive accounting fraud at Tyco, Law360 reports. On April 3, 2009, Judge Barbadoro granted the plan participants' motion for summary judgment that Tyco couldn't use the ERISA provision, according to the Law360 report. VANGUARD GROUP: N.Y. Judge Nixes Suit Over Illegal Investments -------------------------------------------------------------- Judge Denise Cote of the U.S. District Court for the Southern District of New York dismissed a purported class-action lawsuit alleging investment manager The Vanguard Group Inc. and its executives and affiliates illegally invested money in gambling operations that were the subject of a government crackdown in 2006, Law360 reports. On April 2, 2009, Judge Cote ruled that plaintiffs in the proposed class-action litigation lacked standing to pursue claims, according to the Law360 report. Grant McCool of Reuters previously reported that dhareholders in Vanguard funds sued the Vanguard Group Inc., accusing fund managers of investing their money in illegal gambling businesses before the government cracked down on them in 2006 (Class Action Reporter, Sept. 4, 2009). The class-action lawsuit, according to the report, was brought by Deanna McBrearty of New York, New York, and Marylynn Hartsel of Boca Raton, Florida, before the U.S. District Court in Manhattan. The suit asserts claims under the Racketeer Influenced and Corrupt Organizations Act and seeks a jury trial, compensatory and punitive damages. Reuters notes that the lawsuit said "these unlawful investments suffered significant losses when the government began arresting principals of the gambling enterprises," but it did not provide a specific amount. Tom Sheridan, Esq., an attorney for the two plaintiffs, told Reuters that the exact amounts would be revealed in the discovery process, although he estimated that Vanguard's losses exceeded $10 million. "The investments by the plaintiffs are not worthless, but they are less than they would have been if the money had not been invested in offshore gambling companies," Mr. Sheridan said. Specifically, the funds named as defendants in the lawsuit include Vanguard International Equity Index Funds, Vanguard European Stock Index Fund, Vanguard Horizon Funds and the Vanguard Global Equity Fund. Other defendants named in the lawsuit are Alliance Bernstein LP, Acadian Asset Management LLC, Marathon Asset Management LLP. The suit said that Ms. McBrearty first purchased shares in Vanguard European through her individual retirement account in May 2005, the lawsuit said. It also said that Ms. Hartsel bought shares before July 1, 2006, for investment purposes. The report recounts that the U.S. Government cracked down on offshore betting companies in 2006 that included the arrests of executives from British online companies such as Sportingbet and BetOnSports Plc. Large public companies lost billions of dollars in market value and millions of customers when they shut down their Web sites for sports betting, poker and other games in the United States. The lawsuit does not name any of the online sites, Reuters relates. The largest sites such as PartyGaming and Sportingbet earned most of their money from the United States. PartyGaming suspended its U.S. business after President George W. Bush signed the Unlawful Internet Gambling Enforcement Act on Oct. 13, 2006. WAHSINGTON MUTUAL: N.Y. Judge Halts Consumer Fraud Litigation ------------------------------------------------------------- Judge Arthur Spatt of the U.S. District Court for the Eastern District of New York halted a consumer class-action fraud lawsuit against Washington Mutual, Inc., saying it may be more appropriate for the Federal Deposit Insurance Corp to handle claims against the failed savings and loan, Jonathan Stempel of Reuters reports. On April 6, 2009, Judge Spatt accepted the FDIC's argument that the lawsuit should be halted, with the plaintiffs seeking recovery through an administrative review process governing claims against failed lenders. The delay could last through mid-September, the judge wrote, according to the Reuters report. Reuters reported that the FDIC is acting as Washington Mutual's receiver, having arranged a $1.9 billion sale of much of the Seattle-based thrift's banking operations to JPMorgan Chase & Co last Sept. 25. Washington Mutual, the surviving holding company, filed for Chapter 11 bankruptcy protection a day later. The thrift is by far the largest U.S. lender to fail. The suit, captioned, " Cassese v. Washington Mutual Inc. Case No. 05-2724," was filed in the U.S. District Court for the Eastern District of New York back in 2005. It accused Washington Mutual of assessing a variety of small, but allegedly improper fees in connection with mortgage loans, including charges for faxes, recording documents and payoff statements, reports Reuters. WELLS FARGO: Affiliates Still Face Civil Lawsuits Over ARS Sale --------------------------------------------------------------- Several purported civil class actions relating to the sale of auction rate securities (ARS) are pending against various Wells Fargo affiliated defendants. No specific details regarding the class actions were disclosed in the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. WELLS FARGO: Continues to Defend Interchange Litigation in N.Y. --------------------------------------------------------------- Wells Fargo Bank, N.A., Wells Fargo & Company, Wachovia Bank, N.A. and Wachovia Corporation continue to defend a consolidated action filed on behalf of merchants regarding interchange fees associated with Visa and MasterCard payment card transactions. Wells Fargo Bank, N.A., Wells Fargo & Company, Wachovia Bank, N.A. and Wachovia Corporation are named as defendants, separately or in combination, in putative class actions filed on behalf of a plaintiff class of merchants and individual actions brought by individual merchants with regard to the interchange fees associated with Visa and MasterCard payment card transactions. These actions have been consolidated in the U.S. District Court for the Eastern District of New York. Visa, MasterCard and several banks and bank holding companies are named as defendants in various of these actions. The amended and consolidated complaint asserts claims against defendants based on alleged violations of federal and state antitrust laws and seeks damages, as well as injunctive relief. Plaintiff merchants allege that Visa, MasterCard and their member banks unlawfully colluded to set interchange rates. Plaintiffs also allege that enforcement of certain Visa and MasterCard rules and alleged tying and bundling of services offered to merchants are anticompetitive. Wells Fargo and Wachovia, along with other members of Visa, are parties to Loss and Judgment Sharing Agreements, which provide that they, along with other member banks of Visa, will share, based on a formula, in any losses from certain litigation specified in the Agreements, including the Interchange Litigation, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. WELLS FARGO: "Lipetz" Securities Suit v. Wachovia Corp. Pending --------------------------------------------------------------- A purported securities class-action suit, "Lipetz v. Wachovia Corporation, et al.," is pending, according to Wells Fargo & Company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. The purported securities class action was filed on July 7, 2008, in the U.S. District Court for the Southern District of New York by purported Wachovia Corporation shareholders alleging violations of Sections 10 and 20 of the Securities Exchange Act of 1934. An amended complaint was filed on Dec. 15, 2008. Among other allegations, plaintiffs allege Wachovia's common stock price was artificially inflated as a result of allegedly misleading disclosures relating to the Golden West Financial Corp. (Golden West) mortgage portfolio, Wachovia Corporation's exposure to other mortgage related products such as collateralized debt obligations (CDOs), control issues and auction rate securities. The defendants had until Feb. 27, 2009, to respond to the complaint. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. WELLS FARGO: Municipalities' Suits Over Bid Practices Pending ------------------------------------------------------------- Purported class-action lawsuits filed by various municipalities alleging damages caused by the competitive bid practices of Wachovia Bank, N.A.'s municipal derivatives group are pending, according to Wells Fargo & Company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008 The Department of Justice and the SEC, beginning in November 2006, have been requesting information from a number of financial institutions, including Wachovia Bank, N.A.'s municipal derivatives group, generally with regard to competitive bid practices in the municipal derivative markets. Wachovia Bank says that it continues to fully cooperate with the government investigations. Wachovia Bank, along with a number of other banks and financial services companies, has also been named as a defendant in a number of substantially identical purported class actions, filed in various state and federal courts by various municipalities alleging they have been damaged by the activity which is the subject of the governmental investigations. A number of the federal matters have been consolidated for pre- trial proceedings. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. WELLS FARGO: Settlement of RICO Suits v. Wachovia Okayed in Jan. ---------------------------------------------------------------- The settlements of two class-action lawsuits concerning violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) by a former Wachovia Bank, N.A. customer, Payment Processing Center (PPC), were approved in January 2009, according to Wells Fargo & Company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. PPC was a third party payment processor for telemarketing and catalogue companies. On April 12, 2007, a civil class-action suit, "Faloney et al. v. Wachovia Bank, N.A.," was filed against Wachovia Bank in the U.S. District Court for the Eastern District of Pennsylvania by a putative class of consumers who made purchases through telemarketer customers of PPC. The suit alleges that between April 1, 2005 and Feb. 21, 2006, Wachovia Bank conspired with PPC to facilitate PPC's purported violation of the RICO. On Feb. 15, 2008, a second putative class-action suit, "Harrison v. Wachovia Bank, N.A.," was filed in the U.S. District Court for the Eastern District of Pennsylvania by a putative class of consumers who made purchases through telemarketing customers of three other third party payment processors which banked with Wachovia Bank. This suit alleges that Wachovia Bank conspired with these payment processors to facilitate purported violations of RICO. On Aug. 14, 2008, Wachovia Bank reached agreements to settle the Faloney and Harrison class action lawsuits. The settlements received approval from the U.S. District Court for the Eastern District of Pennsylvania on Jan. 23, 2009. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. WELLS FARGO: Wachovia Faces 3 Suits Over Issuance of Securities --------------------------------------------------------------- Wachovia Corporation faces three class action lawsuits relating to its May 2007 issuance of trust preferred securities, according to Wells Fargo & Company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. A purported class-action lawsuit, "Miller, et al. v. Wachovia Corporation, et al.," was filed on Jan. 31, 2008, against Wachovia Corporation, its board of directors and certain senior officers in the New York Supreme Court for the County of Nassau, relating to Wachovia Corporation's May 2007 issuance of trust preferred securities. The plaintiffs allege violations of Sections 11, 12 and 15 of the Securities Act of 1933 as a result of allegedly misleading disclosures relating to the Golden West Financial Corp. mortgage portfolio. Wachovia Corporation removed the case to the U.S. District Court for the Eastern District of New York. On Jan. 16, 2009, the case was voluntarily dismissed by the plaintiff and, on the same day, was refiled in the Superior Court of the State of California, Alameda County. A similar case, "Swiskay v. Wachovia Corporation, et al.," was filed on Dec. 19, 2008, in the same court. The Swiskay case is essentially identical to the Miller case except it includes allegations relating to additional Wachovia preferred offerings. On Jan. 21, 2009, a third case, Orange County Employees' Retirement System, et al. v. Wachovia Corporation, et al., was also filed in the same California Superior Court on behalf of Orange County Employees' Retirement System and others. The complaint contains similar allegations to the Miller and Swiskay cases, except it includes some additional individuals and non- affiliated entities as defendants and adds claims relating to additional issuances of preferred stock and debt securities. Wells Fargo will file appropriate venue and other motions in response to these actions. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. WELLS FARGO: Wachovia Faces 7 Suits Claiming ERISA Violations ------------------------------------------------------------- Wells Fargo & Company's subsidiary, Wachovia Corporation, faces seven purported class actions filed under the Employee Retirement Income Security Act (ERISA), according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Seven purported class actions have been filed against Wachovia, its board of directors and certain senior officers in the U.S. District Court for the Southern District of New York on behalf of employees of Wachovia and its affiliates who held shares of Wachovia common stock in their Wachovia Savings Plan accounts. The plaintiffs allege breach of fiduciary duty under ERISA, among other things, claiming that the defendants should not have permitted Wachovia Corporation common stock to remain an investment option in the Savings Plan because alleged misleading disclosures relating to the Golden West Financial Corp. (Golden West) mortgage portfolio, exposure to collateralized debt obligations (CDOs) and other problem loans, and other alleged misstatements made its stock a risky and imprudent investment for employee retirement accounts. Wells Fargo & Company -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company is a diversified financial services company providing retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The company operates in three segments: Community Banking, Wholesale Banking and Wells Fargo Financial. On Dec. 31, 2008, Wells Fargo acquired Wachovia Corporation. XCEL ENERGY: Awaits Minn. Supreme Court Ruling on Hoffman Appeal ---------------------------------------------------------------- The Minnesota Supreme Court has yet to issue its decision on a plaintiff's appeal in the purported consumer class-action suit, "Hoffman vs. Northern States Power Co.," which seeks discretionary review of the case filed against Northern States Power Co., a wholly owned subsidiary of Xcel Energy, Inc. The complaint, filed on March 15, 2006, was brought on behalf of NSP-Minnesota's residential customers in Minnesota, North Dakota, and South Dakota for alleged breach of a contractual obligation to maintain and inspect the points of connection between NSP-Minnesota's wires and customers' homes within the meter box. The plaintiffs assert that NSP-Minnesota's breach results in an increased risk of fire and that it is in violation of tariffs on file with the Minnesota Power Utilities Commission. Thus, they seek injunctive relief and damages in an amount equal to the value of inspections plaintiffs claim NSP-Minnesota was required to perform over the past six years. NSP-Minnesota filed a motion to dismiss the pleadings. In November 2006, the court issued an order denying NSP-Minnesota's dismissal request. On Nov. 28, 2006, pursuant to a motion by NSP-Minnesota, the court certified the issues raised in NSP-Minnesota's original motion as important and doubtful. The certification permits NSP-Minnesota to file an appeal, and it has done so. Briefs have been filed, and oral arguments were heard Oct. 24, 2007. On Jan. 22, 2008, the Minnesota Court of Appeals determined that the plaintiffs' claims are barred by the filed rate doctrine and remanded the case to the district court for dismissal. The plaintiffs have petitioned the Minnesota Supreme Court for discretionary review, and on April 15, 2008, the court granted the petition. The matter has been briefed by both parties. Oral argument took place on Nov. 4, 2008. It is unknown when a decision will be issued, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Minnesota-based Xcel Energy, Inc. -- http://www.xcelenergy.com -- is a holding company engaged in the utility business in the U.S. XCEL ENERGY: Comer Appeal Still Under Advisement in 5th Circuit ---------------------------------------------------------------- An appeal in the matter, "Comer, et al. v. Nationwide Mutual Insurance Co.," which names Xcel Energy, Inc. as a defendant, remains under advisement in the U.S. Court of Appeals for the Fifth Circuit. In April 2006, Xcel Energy received notice of a purported class- action lawsuit filed in the U.S. District Court in the Southern District of Mississippi. The lawsuit names more than 45 oil, chemical and utility companies, including Xcel Energy, as defendants and alleges that the defendants' CO2 emissions "were a proximate and direct cause of the increase in the destructive capacity of Hurricane Katrina." The plaintiffs allege, in support of their claim, several legal theories, including negligence and public and private nuisance and seek damages related to the loss resulting from the hurricane. In August 2007, the court dismissed the lawsuit in its entirety against all the defendants on constitutional grounds. In September 2007, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Fifth Circuit. Oral arguments were presented to the Court of Appeals on Aug. 6, 2008. On Sept. 26, 2008, the Court of Appeals notified the parties that this matter was set for re-argument on Nov. 3, 2008. No explanation was given for the decision. The Court of Appeals has taken the matter under advisement, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. The suit is "Comer, et al. v. Nationwide Mutual Insurance Co., Case No. 1:05-cv-00436-LTS-RHW," filed in the U.S. District Court for the Southern District of Mississippi, Judge L. T. Senter, Jr., presiding. Representing the plaintiffs are: F. Gerald Maples, Esq. (federal@geraldmaples.com) Meredith A. Mayberry, Esq. (mmayberry@geraldmaples.com) F. Gerald Maples, PA 902 Julia Street New Orleans, LA 70113 Phone: 504-569-8732 - and - Randall Allan Smith, Esq. (rasmith3@bellsouth.net) Stephen M. Wiles, Esq. (smwiles@smithfawer.com) Smith & Fawer 201 St. Charles Ave., Suite 3702 New Orleans, LA 70170 Phone: 504-525-2200 Fax: 504-525-2205 XCEL ENERGY: Deal in Texas-Ohio Energy Case Reached in Jan. 2009 ---------------------------------------------------------------- A settlement agreement in principle was reached in January 2009, in the purported class action captioned, "Texas-Ohio Energy vs. CenterPoint Energy et al.," which names e prime, a wholly owned subsidiary of Xcel Energy, Inc., as a defendant. Twelve lawsuits have been commenced against e prime and Xcel Energy, alleging fraud and anticompetitive activities in conspiring to restrain the trade of natural gas and manipulate natural gas prices. The initial gas-trading lawsuit, a purported class action brought by wholesale natural gas purchasers, was filed in November 2003, in the U.S. District Court in the Eastern District of California. e prime is one of several defendants named in the complaint. This case is captioned, "Texas-Ohio Energy vs. CenterPoint Energy et al." In April 2005, Judge Pro granted defendants' motion to dismiss in Texas-Ohio Energy based upon the filed rate doctrine. Plaintiffs subsequently appealed this dismissal to the U.S. Court of Appeals for the Ninth Circuit. In September 2007, the Court of Appeals reversed the dismissal and remanded the lawsuit to Judge Pro for consideration of whether any of plaintiffs' claims are based upon retail rates not directly barred by the filed rate doctrine. In January 2009, the parties reached a settlement agreement in principle in the Texas-Ohio Energy case. The terms of the settlement in principle will not have a material financial effect upon Xcel Energy, according to the company's Feb. 27, 2009 Form 10-K filing with the U.S. Securities and Exchange Commission for the fiscal year ended Dec. 31, 2008. Minnesota-based Xcel Energy, Inc. -- http://www.xcelenergy.com -- is a holding company engaged in the utility business in the U.S. New Securities Fraud Cases DEUTSCHE BANK: Howard G. Smith Announces Securities Suit Filing --------------------------------------------------------------- Law Offices of Howard G. Smith announces an April 27, 2009, deadline to move to be a lead plaintiff in the securities class action lawsuit filed on behalf of all persons who acquired the 6.375% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust VIII (NYSE:DUA), the 6.625% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust IX (NYSE:DTT), and/or the 7.35% Noncumulative Trust Preferred Securities of Deutsche Bank Capital Funding Trust X (NYSE:DCE) pursuant or traceable to materially false and misleading registration statements and prospectuses issued in connection with the October 2006, July 2007 and November 2007 offerings, respectively, of the securities. The shareholder lawsuit is pending in the United States District Court for the Southern District of New York. The complaint charges Deutsche Bank AG, certain of its subsidiaries, its senior insiders and the investment banks that underwrote the Offerings with violations of federal securities laws. Specifically, the complaint alleges that the Registration Statements issued in connection with the Offerings were false and misleading and filed to disclose, among other things, that: -- the Company failed to properly record provisions for credit losses, residential mortgage-backed securities, commercial real estate loans, and exposure to monoline insurers; -- the Company's internal controls were inadequate; -- the Company's internal risk management systems were inadequate to limit the Company's exposure to credit trading, equity derivatives and proprietary equity trading; and -- the Company was not as well capitalized as represented. No class has yet been certified in the above action. For more details, contact: Howard G. Smith, Esq. (howardsmith@howardsmithlaw.com) Law Offices of Howard G. Smith 3070 Bristol Pike, Suite 112 Bensalem, Pennsylvania 19020 Phone: (215) 638-4847 or (888) 638-4847 MORGAN STANLEY: Bernstein Litowitz Files Securities Fraud Suit -------------------------------------------------------------- The law firms Bernstein Litowitz Berger & Grossmann LLP and Pond, Gadow & Tyler, P.A., on December 2, 2008, filed a class action lawsuit in the Superior Court for the State of California, County of Orange on behalf of their client the Public Employees' Retirement System of Mississippi and similarly situated purchasers of Morgan Stanley Mortgage Pass-Through Certificates pursuant to or traceable to the false and misleading March 14, 2006 Registration Statement and accompanying prospectuses. On December 31, 2008, defendants filed a Notice of Removal, removing the case from the Superior Court to the United States District Court for the Central District of California. On March 6, 2009, the District Court for the Central District of California transferred the action to the United States District Court for the Southern District of New York, where it is now pending as Case No. 09-02137. The class includes purchasers of the following Certificates: Morgan Stanley Mortgage Loan Trust 2006-4SL, Morgan Stanley Mortgage Loan Trust 2006-5AR, Morgan Stanley Mortgage Loan Trust 2006-5ARW, Morgan Stanley Mortgage Loan Trust 2006-6AR, Morgan Stanley Mortgage Loan Trust 2006-7, Morgan Stanley Mortgage Loan Trust 2006-8AR, Morgan Stanley Mortgage Loan Trust 2006-9AR, Morgan Stanley Mortgage Loan Trust 2006-10SL, Morgan Stanley Mortgage Loan Trust 2006-11, Morgan Stanley Mortgage Loan Trust 2006-12XS, Morgan Stanley Mortgage Loan Trust 2006-13AX, Morgan Stanley Mortgage Loan Trust 2006- 14SL, Morgan Stanley Mortgage Loan Trust 2006-15XS, and Morgan Stanley Mortgage Loan Trust 2006-16AX. The complaint alleges that on March 14, 2006, defendants caused a Registration Statement to be filed with the SEC in connection with and for the purpose of issuing billions of dollars of Certificates. The Certificates were issued pursuant to the Prospectus Supplements, each of which was incorporated into one of the Registration Statements. The Certificates were supported by pools of mortgage loans. According to the complaint, the Offering Documents included false statements and/or omissions about: -- the underwriting standards used by the loan originators; -- the standards and guidelines used by Morgan Stanley when evaluating and acquiring the loans; -- the appraisal standards used to value the properties collateralizing the loans, and the corresponding loan- to-value ratios of the loans; -- the credit enhancement supporting the loan securitization process; and -- the pre-established ratings assigned to each tranche of Certificates issued pursuant to the offering documents. Ultimately, the truth about the performance of the mortgage loans that secured the Certificates began to be revealed to the public, increasing the risk of the Certificates receiving less cash flow in the future and the likelihood that investors would not receive it on a timely basis. The credit rating agencies also began to put negative watch labels on the Certificates, ultimately downgrading many. As a result, the Certificates are no longer marketable at prices near the price paid for them, and the holders of the Certificates are exposed to much more risk with respect to both the timing and absolute cash flow to be received than the Offering Documents represented. The complaint alleges that Morgan Stanley, certain of its officers and directors and the issuers and underwriters of the Certificates violated Sections 11, 12 and 15 of the Securities Act of 1933. Plaintiff seeks to recover damages on behalf of all purchasers of the Certificates listed above. For more information, contact: David R. Stickney, Esq. (davids@blbglaw.com) Timothy A. DeLange, Esq. (timothyd@blbglaw.com) Bernstein Litowitz Berger & Grossmann LLP Phone: (858) 793-0070 Web site: http://www.blbglaw.com REGIONS FINANCING: Izard Nobel Announces Securities Suit Filing --------------------------------------------------------------- The law firm of Izard Nobel LLP announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of those who purchased or acquired the 8.875% Trust Preferred Securities of Regions Financing Capital Trust III (NYSE: RF-PZ) pursuant or traceable to a registration statement and prospectus issued in connection with the April 2008 offering of the Securities. The Complaint charges that Regions Financial Corporation and certain of its officers, directors, auditors and underwriters violated federal securities laws. Specifically, defendants omitted the following material facts from the Registration Statement issued in connection with the Offering: -- Regions failed to properly record provisions for loan losses; -- the Company failed to properly account for impaired assets; -- Regions failed to properly account for goodwill; -- the Company's internal controls were inadequate; and -- Regions was not as well capitalized as represented. On January 20, 2009, Regions announced a loss for the quarter and year ended December 31, 2008, including a loss for the quarter ended December 31, 2008 of $9.01 per diluted share, which was "largely driven by a $6 billion non-cash charge for impairment of goodwill." On this news, the price of the Securities dropped significantly. For more details, contact: Nancy A. Kulesa, Esq. Wayne T. Boulton, Esq. Izard Nobel LLP Phone: (800) 797-5499 e-mail: firm@izardnobel.com Web site: http://www.izardnobel.com/ ********* A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the Class Action Reporter. Submissions via e-mail to carconf@beard.com are encouraged. Each Friday's edition of the CAR includes a section featuring news on asbestos-related litigation and profiles of target asbestos defendants that, according to independent research, collectively face billions of dollars in asbestos-related liabilities. ********* S U B S C R I P T I O N I N F O R M A T I O N Class Action Reporter is a daily newsletter, co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Glenn Ruel S. Senorin, Stephanie T. Umacob, Gracele D. Canilao, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN 1525-2272. 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