Synovus Class Action Lawsuit Settlement

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Synovus Financial Corporation has settled the Securities Class Action Lawsuit filed against the corporation back in July of 2009.

The lawsuit, initially filed by the City of Pompano Beach General Employees' Retirement System, charged bank officials with deceiving investors by knowingly falsifying statements and misrepresenting the bank's exposure to risk in relation to loans for a Georgia resort.

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AIG Rejects Shareholder Lawsuit 

 

 

AIG Rejects Call To Join Shareholder Lawsuit Challenging 2008 Federal Bailout

shareholder-lawsuit-aigAmerican financial giant AIG has decided against joining the shareholder lawsuit challenging the terms of the $182 billion federal rescue package to save it from bankruptcy in 2008. The $25 billion litigation filed in 2011 contends that the terms of the bailout, including 92% equity stake surrendered to the government at high interest rates, were detrimental to the interest of shareholders. Popularly known as Greenberg lawsuit, it also accuses the government of unfairly burdening the insurance company facing its worst financial crisis.

The board of American International Group met in New York on January 9, 2013, and rejected the representation made by former CEO and lead plaintiff Maurice Greenberg to join the shareholder lawsuit against the U.S. Government. Though the reason behind the decision was not made public, it is widely believed that fear of widespread public backlash deterred AIG board from joining the litigation. In December 2012, the government sold back the shares it held under the rescue package conditions, and the New Year day saw AIG starting the nationwide “Thank You, America” campaign, expressing gratitude toward taxpayers for bailing it out from the crisis.

Background of Greenberg Lawsuit

The Federal Bailout

In September 2008, downgrading of credit rating agencies following $13.2 billion reported half-yearly losses forced a liquidity crisis on AIG. The U.S. Federal Reserve announced $85 billion secure credit under the Federal Reserve Act to avert collapse of the company. Its Board of Governors authorized the Federal Reserve Bank of New York to formulate a plan to infuse credit-liquidity over 24-months. All AIG assets, including stocks of regulated and non-regulated subsidiaries were collateralized. The federal government got 79.9 percent equity stake and the right to set aside dividend payments to shareholders.

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Zicam Investor Lawsuit

Supreme Court Ruling on Matrixx

zicam investor lawsuitIn a narrow judgment, the U.S. Supreme Court has declared that the class-action lawsuit filed by investors against Matrixx Initiatives Inc can proceed, declaring that the plaintiffs had shown enough of a claim for the case to go forward. The court ruling deals the pharmaceutical company a big defeat, declaring that the drugmaker had failed to reveal initial reports of adverse side effects from its Zicam remedy.

The Supreme Court of the United States has rejected limits to lawsuits against drug makers. The court ruled in favor of investors, who had filed a securities fraud class action against the manufacturer of the now-discontinued Zicam nasal cold remedies, alleging that the company violated the §10(b) Securities Exchange Act of 1934 and Securities and Exchange Commission Rule10b–5 by concealing 23 reports of people who had complained of loss of sense of smell after using Zicam as early 2004.

The investors alleged that the pharmaceutical company issued misleading statements on the possible link between Zicam Cold Remedy and loss of sense of smell. The U.S. Supreme Court judgment gives shareholders more leeway to file a lawsuit against pharmaceutical and biotechnology companies for not disclosing reports of dangerous side effects of drugs manufactured by them.
In a unanimous judgment, the justices ruled that the petitioners had every right to be informed of the side effects of the Zicam nasal spray and gel, manufactured by Matrixx. The judges declared that Matrixx should defend against these accusations of fraud, which claimed that it failed to disclose the side effects of its spray and gel. The high court ruled that, under the federal securities law, even less definitive evidence of side effects is enough to require disclosure.

The lawsuit also cites nine other lawsuits filed by people affected by recalled Zicam nasal products from October 2003 to January 2004, alleging that the drug maker either omitted or concealed material information about the safety of the Zicam products. Numerous consumer lawsuits have also been filed against the pharmaceutical company for “product liability, negligence, fraud, and breach of warranties.”

The Supreme Court ruling has made it easier for investors to take pharmaceutical companies court for deliberately withholding information about a drug or product.

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Merck Lawsuit Settlement

International drug maker Merck & Co. has settled a shareholder lawsuit over the release of a potentially damaging study on the drug Vytorin.

At the center of this particular 4 year old lawsuit is shareholders claim that Merck & Co. delayed releasing the results of a study that Merck & Co had hoped would boost sells of it’s high cholesterol drug Vytorin. The study instead revealed data that would likely slow future sells of Vytorin.

The Vytorin ENHANCE study results revealed that Vytorin was equally effective at reducing plaque buildup as its one of its drug components in stand alone form. The study showed Zocor, one of the two components in Vytorin was just as effective when used alone as it is as a sub-component of Vytorin.

Vytorin has been a multi billion dollar seller for Merck and this is possibly the reasoning behind withholding of study data from patients and the public in general.

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Countrywide Lawsuit

Bank of America subsidiary Countrywide financial has been hit with another lawsuit for misrepresenting the quality of securities it had been selling to investors prior to the financial melt down.

The lawsuit filed by a group of investors that include New York Life Insurance Co. as well as TIAA-CREF accuses Bank Of America of massive fraud related to the sale of mortgage securities.

The investors behind the lawsuit were led to believe that they were purchasing conservative investments that posed very little risk instead of the high risk loans that eventually led to significant losses for the investors.

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