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 settlementContact 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.

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