Our law firm is investigating claims on behalf of investors who sustained losses in Wachovia preferred securities and bonds/notes. In August 2011, a global settlement was reached with all defendants in the class action lawsuit, In re: Wachovia Preferred Securities and Bond/Notes Litigation, Case No. 09-cv-06351, on behalf of investors who purchased certain Wachovia n/k/a Wells Fargo (NYSE: WFC) preferred securities and bonds pursuant or traceable to numerous public offerings between July 31, 2006 and May 29, 2008. The settlement consists of a $590 million settlement with Wachovia and its affiliated entities, including various underwriters and certain former Wachovia officers and directors, as well as a $37 million settlement with KPMG, LLP, Wachovia’s auditor. The settlements are subject to review and approval by the District Court Judge.
The class action alleged that Wachovia misrepresented and/or failed to disclose material facts concerning the nature and quality of its multi-billion dollar option-ARM (adjustable rate mortgage) “Pick-A-Pay” mortgage loan portfolio. It was also alleged that Wachovia’s publicly disclosed loan loss reserves were materially inadequate, in violation of Generally Accepted Accounting Principles (“GAAP”). The complaint added the undisclosed problems in the “Pick-A-Pay” mortgage loan portfolio brought Wachovia to the brink of insolvency by September 2008.
Potential class members who purchased Wachovia preferred securities and bonds/notes from an underwriter/broker dealer defendant should consider whether they should opt out to file an individual securities arbitration claim against the brokerage firm who sold them the products, or participate in the class action. KlaymanToskes reminds investors of the benefits of filing an individual securities arbitration claim, as opposed to participating in a class action lawsuit. By participating in a class action lawsuit, an investor may only recover a nominal amount. However, if one has experienced significant losses, it may be more beneficial for them to file an individual securities arbitration claim. In 2003, KlaymanToskes conducted a detailed study of securities arbitration versus class action. The study concluded that investors who file a securities arbitration claim traditionally obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit. To view the full results of the comparison, click here.
Investors who purchased Wachovia preferred securities and bond/notes from a full service brokerage firm and sustained significant losses can contact our law firm to explore their legal rights and options.