MCI WorldCom to Emerge from Bankruptcy, Existing WorldCom and MCI Shareholders Shares to be Cancelled - Parker & Waichman, LLP to Represent Additional Victims of MCI and Smith Barney Stock FraudDec 1, 2003 | PRNewswire
Recently the United States Bankruptcy Court approved MCI's (Pink Sheets: WCOEQ - News, MCWEQ - News, MCIAV - News) Plan of Reorganization, which allows MCI to emerge from Chapter 11 bankruptcy. As a result of MCI's pending emergence from Chapter 11 it is likely that shares of WorldCom and MCI traded under the symbols WCOEQ and MCWEQ will be cancelled, essentially leaving existing shareholders with worthless shares.
Parker & Waichman will continue to represent additional plaintiffs and encourages current and former WorldCom and MCI shareholders, including former WorldCom and MCI employees, to visit www.worldcomstockfraud.com and www.smithbarneyfraud.com for more information on these claims and to request a free case evaluation.
Parker & Waichman and affiliated counsel will soon be filing a new round of claims against Salomon Smith Barney, a subsidiary of Citigroup (NYSE: C - News), alleging that the investment firm issued analyst reports and advice that were fraudulent in order to protect the firm's investment banking relationship with WorldCom. Former Salomon Smith Barney analyst Jack Grubman will be named in some of the claims. Recently, Judge Cote, who is presiding over the WorldCom shareholder class action lawsuit, ruled that Salomon Smith Barney must be included as a defendant in that case.
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 basis. The misconduct of Smith Barney was detailed in the settlement announced this year 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 thereunder, 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