The WorldCom Settlement: What it Means for You
Important! The deadline for any WorldCom investor to keep control over his or her own claim is only weeks away!
If no action is taken soon by a WorldCom investor to "opt out" of the class action law suits on file, that investor will be stuck with whatever amount is to be paid to him or her as part of class.
But note: Investors with viable claims usually can obtain substantially more in recovery by filing their own claims for damages than they would receive as a member of a class action!News:
Citigroup will pay $2.65 billion to the former stock and bond owners of WorldCom. This sum is a settlement for the bank's role in misrepresentations that eventually sent the telecommunications company into bankruptcy two years ago.
The money will go into a pool paid out to purchasers of WorldCom stock and bonds between April 29, 1999, through June 25, 2002.
Citigroup and a few others (the Citigroup Defendants) agreed to pay $1.4575 billion to settle the claims of investors who purchased bonds that WorldCom issued in May 2000 and May 2001. Salomon served as underwriter for approximately one-third of the outstanding bonds issued in those offerings. Litigation continues against the 17 investment banks that underwrote the remaining two-thirds of those WorldCom bonds, including J.P. Morgan Securities, Bank of America Securities, and Deutsche Bank. If these banks settle at at the same pro rata ratio as Salomon, another approximately $2.8 billion would be paid to bond purchasers.
Also, the Citigroup Defendants have agreed to pay $1.1925 billion to investors who purchased WorldCom common stock and other publicly-traded securities of WorldCom during the Class Period.
This is the second largest settlement in securities class action history, and represents the largest amount ever recovered in a securities class action from a party other than the company that issued the subject securities.
It will probably be a year or more before investors receive any money from the settlement. Also, this settlement doesn't cover investors who filed arbitration cases against Citigroup, Salomon Smith Barney and its former telecom analyst Jack Grubman for recommending the stock. There are plenty of cases involving WorldCom yet to be resolved.
Some investors, seeing the size of the class-action lawsuit, might drop their individual cases and join the class. The settlement might give other investors the encouragement to press their arbitration cases. As experienced securities attorneys, we can help you decide the best course of action for your individual case. Contact us for a free consultation.
What if you were one of hundreds of thousands of investors who bought WorldCom shares between April 29, 1999, and June 25, 2002? You could be eligible for a share of the settlement. Contact us for more details.
We represent investors nationwide. If you have lost significant money in WorldCom securities contact us to advice about whether to pursue an individual claim or to join the class action.