Retiree Loses $2 Million Life Savings, Sues For Pain
Lawsuit may create way for thousands wiped out by accounting, securities fraud to seek redressAug 19, 2003 | AP
A retiree who lost his $2 million life savings when former WorldCom stock plummeted amid the company's collapse last year sued Citigroup on Thursday for pain and suffering.
The lawsuit may create a new way for thousands of Americans who lost their fortunes in accounting scandals to seek redress.
Anthony Amodio's lawsuit against the nation's biggest bank asserts that he is penniless and ill with heart problems because he was advised to keep his 23,820 shares of WorldCom stock amid claims that the share price would climb to $150, even when it was valued in April 2002 at only $7.
The suit would be the first to compel depositions from former WorldCom chief executive Bernie Ebbers, Citigroup chairman Sanford Weill and its former star telecoms analyst Jack Grubman.
The suit blames the trio for recklessly and intentionally inflating claims about the stock's potential, making them millions while countless Americans lost money.
``There isn't any dispute that these people were doing things to the detriment of their own clients, and yet they walk away without one person being indicted, without one criminal act being alleged, without one penny in civil suits personally against them, without any detriment whatsoever,'' Amodio's lawyer said. ``They've gotten away with it so far. But this is going to be the key that opens the door.''
Mary Ellen Hillery, a spokeswoman for Salomon Smith Barney, the brokerage arm of Citigroup that's also named in the lawsuit, said the company had no comment because it had not seen the complaint.
Many investors burned by securities fraud have few options to recover their losses when a company such as WorldCom, which was brought down by an $11 billion accounting scandal, seeks bankruptcy protection. Shareholders must rely largely on lawsuits and regulatory fines to recover some of what they lost.
Shareholders also are often barred from suing their brokerage firms because investors usually sign waivers agreeing to arbitration to settle disputes.
Amodio claims he signed no waiver because his shares, acquired during his 26-year employment, were held in a Citigroup account.
He had no account with Salomon Smith Barney, but Citigroup referred him to the firm for advice when he repeatedly called with concern about the stock's plunging value.
``They painted such a picture to me to hold the shares because I was going to make my fortune,'' Amodio said. ``I looked forward to the golden years and now I look forward to the bitter years.''
He retired as a national account manager executive in 1997 after spending nearly three decades at MCI. He invested in the company's stock and was required to trade it for shares in WorldCom when it purchased MCI, according to his suit.
He called Citigroup and Salomon as early as July 1999, when his shares would have been valued at $2.1 million, and was advised that Grubman predicted the stock to break triple digits by the year's end.
Suing under Florida's legal tort of ``outrage,'' his lawsuit could be the first to demand losses for emotional distress over a financial loss, according to legal experts.