This website provides information and updates relating to In re WorldCom Securities Litigation, a consolidated, certified class action pending in the Southern District of New York before District Court Judge Denise L. Cote.
One of the largest securities cases in history, this action is being prosecuted on behalf of a court-certified class of all individuals or entities (excluding defendants and related parties)(the "Class") who purchased or acquired publicly traded securities of WorldCom, Inc. during the period from April 29, 1999 through and including June 25, 2002 (the "Class Period") and who were injured thereby. The Class includes persons and entities who: (1) purchased or acquired shares of WorldCom common stock in the secondary market or in exchange for shares of acquired companies pursuant to a registration statement, and/or (2) purchased or acquired publicly traded debt securities of WorldCom in the secondary market or pursuant to a registration statement during the Class Period.
On August 15, 2002, Judge Cote appointed the Comptroller of the State of New York, the sole Trustee of the New York State Common Retirement Fund, which is the Nation's second-largest public pension fund, to serve as Lead Plaintiff in the WorldCom Securities Litigation and approved Lead Plaintiff's selection of Barrack, Rodos & Bacine and Bernstein Litowitz Berger & Grossmann LLP as co-lead counsel for the Class. Fresno County Employees Retirement Association, the County of Fresno, California and HGK Asset Management are additional named plaintiffs and Class representatives in the WorldCom Securities Litigation. If you have questions about the functions of a lead plaintiff or lead counsel in securities class actions click on Q&A .
The WorldCom Securities Litigation was certified by Judge Cote as a Class Action on October 24, 2003. Class Order. For more information about the meaning of class certification, click on Q&A . For more information on your rights as a class member, click on Notice of Class Action.
As discussed in more detail below, the consolidated complaint of Lead Plaintiff, the New York State Common Retirement Fund, was filed on behalf of the Class in the fall of 2002 (the Class Action Complaint or the Initial Complaint), and updated in August 2003 (the First Amended Class Action Complaint), and in December 2003 (the Corrected First Amended Class Action Complaint).
The Class Action Complaint was filed on October 11, 2002 and asserted on behalf of the Class claims for violations of federal securities laws against members of WorldCom's Board of Directors and/or senior executives, including former CEO Bernard J. Ebbers, former CFO Scott D. Sullivan, former Controller David F. Myers, and former accounting supervisor Buford Yates; investment banks which acted as WorldCom's underwriters and financial advisors during the Class Period, including Salomon Smith Barney, Inc.; Jack Grubman, a former Salomon Smith Barney telecommunications analyst who issued numerous analyst reports about WorldCom during the Class Period; and Arthur Andersen LLP, which acted as WorldCom's auditors during the Class Period, Andersen's former partners Melvin Dick and Mark Schoppet and two entities affiliated with Andersen. WorldCom is not a defendant in this action because it is in bankruptcy. For a list of all current defendants in this action, click on Parties .
On December 13, 2002, certain defendants moved to dismiss either all or parts of the claims asserted against them in the Class Action Complaint. On January 24, 2003, Lead Plaintiff filed its opposition to defendants' motions to dismiss. On May 19, 2003, Judge Cote denied, in major part, those defendants' motion to dismiss the Class Action Complaint, finding that the Complaint for the most part adequately pleaded claims asserted therein, and granting Lead Plaintiff leave to re-plead certain dismissed claims. On June 24, 2003, the Court denied the separate motion to dismiss the Class Action Complaint filed by Arthur Andersen LLP and granted motions to dismiss brought by Arthur Andersen (United Kingdom), Andersen Worldwide Societe Cooperative, and former Arthur Andersen partners Melvin Dick and Mark Schoppet.
On August 1, 2003, Lead Plaintiff filed the First Amended Class Action Complaint on behalf of the Class. The First Amended Class Action Complaint re-pleaded with more specificity or corrected certain factual allegations against certain defendants. On September 5, 2003, the Salomon Defendants (Salomon Smith Barney, Inc., Citigroup, Inc., and Jack Grubman) and the Audit Committee Defendants (James Allen, Judith Areen, Max Bobbitt and Francesco Galesi) moved to dismiss the Amended Complaint; the other defendants did not move against the Amended Complaint. On October 24, 2003, Judge Cote denied Salomon's motion to dismiss the Amended Complaint finding that Lead Plaintiff adequately pleaded claims against the Salomon Defendants. On December 1, 2003, Judge Cote granted the Audit Committee Defendants' motion to dismiss the Section 10(b) securities fraud claim asserted against them.
On December 1, 2003, Lead Plaintiff filed a Corrected First Amended Class Action Complaint to name six foreign affiliates of certain underwriter defendants as additional underwriter defendants in Securities Act claims arising from the May 2001 public offering of WorldCom's bonds. The Corrected First Amended Class Action Complaint also clarifies the relationship between defendants JP Morgan Chase & Co. and JP Morgan Securities, Inc.
Even before the Initial Complaint was filed, Lead Plaintiff moved in the Bankruptcy Court seeking relief from the bankruptcy stay in order to obtain critical documents from WorldCom, which the Company had previously produced to Congress, the Securities and Exchange Commission and the United States Attorney's Office. WorldCom opposed this motion. On November 8, 2002, the Bankruptcy Court granted Lead Plaintiff's motion, subject to Judge Cote's approval. On November 12, 2002, Lead Plaintiff moved in the District Court for relief from a discovery stay imposed by the Private Securities Litigation Reform Act to obtain access to these critical documents. A number of defendants opposed this motion. Judge Cote granted Lead Plaintiff's motion on November 21, 2002, thus partially lifting the discovery stay..
Since Judge Cote's May 19, 2003 opinion denying, in major part, defendants' motion to dismiss, the discovery stay has been fully lifted, and Lead Plaintiff has vigorously pursued the production of defendants' and relevant third parties' documents. So far, defendants and third parties have produced millions of pages of documents and deposition discovery has commenced. Judge Cote has ordered that fact discovery be concluded by June 18, 2004. Expert discovery and motion practice are scheduled to follow shortly thereafter, and the jury trial will begin on January 10, 2005. You can view the Court's scheduling orders as well as all other Court orders issued in the WorldCom Securities Litigation by clicking on .
On November 7, 2002, Judge Cote ordered the parties to participate in settlement negotiations under the supervision of Magistrate Judge Michael H. Dolinger. In the fall of 2003, the Court invited the Honorable Robert W. Sweet, United States District Court Judge, to assist in oversight of the settlement discussions. Those discussions are continuing. For more information about these and other significant developments in the WorldCom Securities Litigation, click on Key Developments.
This site is maintained by Bernstein Litowitz Berger & Grossmann LLP and Barrack, Rodos & Bacine and it is not an official website of the District Court for the Southern District of New York or the New York State Common Retirement Fund.