HARTFORD, Conn., Oct. 17, 2006 (PRIMEZONE) -- The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of all persons who purchased the common stock of Legg Mason, Inc. ("Legg Mason" or the "Company") (NYSE:LM) between June 24, 2005 and July 24, 2006, inclusive, (the "Class Period"). Also included are those who acquired shares in a secondary offering on 3/9/06 or through the acquisitions of Permal or Worldwide Asset Management
The Complaint alleges that on 6/24/05, Legg Mason announced that it would swap its brokerage unit plus $2.1 billion in stock and cash for Citigroup's $435 billion money-management division and would buy hedge fund firm The Permal Group. Defendants stated the acquisition would be immediately accretive to earnings, have a positive effect on profitability and leave Legg Mason with a "Conservative Balance Sheet". Throughout the Class Period, defendants failed to disclose the following: (i) Legg Mason was unable to successfully integrate Citigroup's worldwide asset management business ("CAM") assets because of a lack of compatible corporate infrastructures; (ii) Citigroup had undisclosed pre-existing sales expenses to third-party brokers; (iii) post-acquisition cost "savings" were unattainable; (iv) Citigroup customers had withdrawn billions of dollars of assets; and (v) the Company's ability to achieve earnings growth was severely strained, due to deteriorating investment returns on Bill Miller's $18.7 billion Legg Mason Value Trust, the Company's flagship equity fund which was having its worse year since 1990.
On July 25, 2006 the Company disclosed that the CAM acquisition costs were spiraling and customers were withdrawing funds, putting further pressure on revenues and margins and causing Legg Mason to miss the earnings targets for 1Q 07. On this news, stock price fell below $85 per share.
If you are a member of the class, you may, no later than December 15, 2006, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail: sn06106@aol.com, or visit our website: www.snlaw.net.