If you have lost money in the stock market due to fraud, misrepresentation, negligence, or for other reasons, we can help you. We have successfully recovered over $250 million in FINRA securities arbitrations.*
Need Legal Help? Contact Us. Call +1 (888) 997-9956
In early 2008, Lehman Brothers made an initial offering of its Preferred Stock, Series J. In connection with this offering, however, Lehman issued a Prospectus which contained material misstatements and omissions. Specifically, we believe that the representations made in Lehman’s Prospectus were materially false and misleading because at the time of the Offering, Lehman was already laboring under several negative factors that were not properly disclosed in the Prospectus, including the failure to set aside adequate allowances to cover Lehman’s steadily increasing portfolio of underperforming subprime related products, and to adequately write-down residential and commercial mortgage and real estate assets. At the time, these factors were already causing a material adverse affect on Lehman’s operations and led directly to the firm’s announcement of September 15, 2008, that it would be seeking protection under the Federal Bankruptcy Code. Lehman would eventually be credited for initiating the largest bankruptcy filing in U.S. history.
To facilitate the issuance of the Lehman Preferred Stock J, Lehman retained the services of several underwriters, including Banc of America Securities, LLC, Citigroup Global Markets, Inc., Merrill Lynch, Pierce, Fenner & Smith, Morgan Stanley & Co., Inc., UBS Securities, LLC and Wachovia Capital Markets, LLC. We believe that these underwriters could have, and should have, discovered the misstatements and omissions in Lehman’s Prospectus prior to its filing with the SEC and distribution to the investing public. As a result of an inadequate due diligence investigation on the part of the underwriters, they failed to discover the misstatements and omissions in Lehman’s Prospectus on the Preferred Stock J.
On September 15, 2008, pursuant to Chapter 11 of the Federal Bankruptcy Code for the Southern District of New York, Lehman voluntarily filed a petition to reorganize the Company. Lehman’s bankruptcy became the largest bankruptcy filing in history and essentially wiped out the investment interests of investors of Lehman Preferred Stock J. Due to the issuance of various false and misleading statements, the market price of Lehman Preferred Stock J was artificially inflated.