PHILADELPHIA, June 11, 2008 (PRIME NEWSWIRE) -- The law firm of Spector Roseman & Kodroff, P.C. has filed a class action complaint against Wachovia Corporation (NYSE:WB) and various officers and administrators, alleging violations of the Employee Retirement Income Security Act ("ERISA") in the handling of investments in the Wachovia Savings Plan. The complaint was filed June 9 in the U.S. District Court for the Southern District of New York.
The complaint alleges that Plan administrators and fiduciaries breached their duties to Plan participants and beneficiaries by continuing to invest in and hold Wachovia stock despite the fact that they knew or should have known that Wachovia was not properly reporting its financial condition and was not disclosing significant problems which had the effect of inflating the value of Company stock. Among the matters allegedly not disclosed were:
(1) Wachovia continued to issue non-conforming real estate mortgages to borrowers without considering their credit scores or verifying their assets or employment status;
(2) Wachovia understated and delayed recognition of its loan losses and took other actions that violated federal securities laws;
(3) Wachovia failed to adjust its methodology for loss provisions in a manner that took into account known changes in the credit landscape;
(4) Wachovia misled investors as to its auction rate securities and failed to disclose that these instruments were actually long-term instruments that were not liquid;
(5) Wachovia was, due to its investment in hedge funds managed by Citigroup, heavily exposed in bank-owned life insurance policies, an investment which later caused it to report a $315 million write-down for the first quarter of 2008; and
(6) Wachovia failed to maintain sufficient management controls to timely address problems in a manner that has affected the Company's reputation and perceived integrity.
Notwithstanding the above, the complaint alleges that Plan fiduciaries maintained a large investment of Plan assets in Company stock at a time when they should have known that it was an unsuitable as a savings and retirement investment. Wachovia employees who had most of their Plan assets in Company stock have incurred a substantial loss in their retirement investment.
A breach of fiduciary duties occurs when fiduciaries fail to manage the assets of the Plan in the sole interest of the plan participants by investing the assets in Company stock when it was no longer a prudent investment for participants' retirement savings.
The proposed class includes all persons who were participants in or beneficiaries of the Wachovia National Corporation Savings Plan and whose accounts in the Plan were invested in Wachovia Stock at any time during the period January 1, 2006 through the present. Excluded from the class are any defendants, their officers and directors, members of their immediate families, or their heirs, successors or assigns.
If you are a participant in the Wachovia Savings Plan, you can contact Spector Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the case and how you may have been harmed. You may also call Robert M. Roseman or Ted Lieverman at the firm's toll-free number, 888-844-5862. Even if you have relatively small losses, a class action lawsuit can protect your rights at no cost to you.
Spector Roseman & Kodroff, P.C., a Philadelphia, Pennsylvania law firm, concentrates its practice in class action and complex litigation, including actions dealing with securities laws, antitrust, contract and commercial claims, and labor and employment. The firm is active in major litigation pending in federal and state courts throughout the United States, including claims for participants of employee benefit funds under ERISA and other laws. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions. As a result of the efforts of the firm, billions of dollars have been recovered through judgments and settlements on behalf of injured class members.
For more information about the firm, visit its website at http://www.srk-law.com.