Existing WorldCom and MCI Shareholders Stock Likely to Become Worthless - Parker & Waichman LLP to Represent Additional Victims of MCI (Formerly WorldCom) and Smith Barney Stock FraudNov 5, 2003 | PR Newswire
Parker & Waichman, LLP announces that it and its affiliated counsel have been retained by a substantial number of additional victims of the alleged stock fraud surrounding WorldCom (Pink Sheets: WCOEQ - News, MCWEQ - News and MCIAV - News), now operating as MCI, and Smith Barney.
Parker & Waichman's team will soon be filing a new round of claims against Smith Barney. These individuals have been financially injured by the fraudulent and inappropriate advice of Smith Barney. Former Smith Barney analyst Jack Grubman will be named in some of the claims.
Parker & Waichman will continue to represent additional plaintiffs and encourages current and former WorldCom shareholders including former WorldCom employees to visit www.worldcomstockfraud.com and www.smithbarneyfraud.com for more information on these claims and to request a free case evaluation.
Last week, the United States Bankruptcy Court approved MCI's Plan of Reorganization, which paves the way for the company to emerge from Chapter 11 bankruptcy. As a result of MCI's pending emergence from chapter 11 it is likely that shares of MCI traded under the symbols WCOEQ and MCWEQ will be cancelled leaving existing shareholders with a mere fraction of their initial investment. The SEC has set aside $250 million that MCI paid in fines to compensate investors who can prove they owned shares of WorldCom prior to June 2002, one month before the company filed for bankruptcy. At the time of the June 2002 cut-off date, 62,772 investors owned 2.96 billion shares of WorldCom, while 52,036 stockholders owned 118 million shares in MCI. If every shareholder filed a claim, they would receive 8.1 cents per share.
Following last week's approval by the Bankruptcy Court of MCI's reorganization plan, the chairman and CEO of MCI proclaimed that it was a "Great Day for MCI." Jerrold Parker, co-founder of Parker & Waichman commented, "This statement clearly shows that MCI's policy of putting its shareholders last in order to benefit its executives and investment bankers has not changed. While MCI believes that its emergence from bankruptcy is positive, the plan is devastating to the thousands of investors, including current and former employees, who lost their retirement savings and college funds. These shareholders' shares will likely be worthless and the hope that many had of their investments recovering will be eliminated. We are committed to seeing that justice prevails, and we will continue to aggressively represent victims of the fraudulent activities of WorldCom and Smith Barney."
These complaints will charge Smith Barney with violations of Section 15(c) of the Securities Exchange Act of 1934, as well as various state statutes, for issuing fraudulent research reports and for violating NYSE Rules 401, 472 and 476(a)(6), and NASD Rules 2110 and 2210, for issuing research reports that were not based on principles of fair dealing and good faith, did not provide a sound basis for evaluating facts, contained exaggerated or unwarranted claims about the covered companies, and/or contained opinions for which there were no reasonable bases. The misconduct of Smith Barney was detailed in the settlement announced last month by Securities Regulators and state securities officials.
Of the $1.4 billion settlement, Citigroup, the parent company of Smith Barney, will pay a total of $400 million in fines and fees that will go toward independent research and investor education programs. Also under the settlement, Jack Grubman agreed to a $15 million fine and to be banned permanently from the securities industry.
These additional complaints will also charge that WorldCom violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated there under, by issuing a series of materially false and misleading statements. WorldCom has publicly announced that instead of the $1.4 billion in profits the Company reported in 2001 and $130 million in the first quarter of 2002, it actually lost a considerable amount of money during those same periods.
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Parker & Waichman, LLP