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U.S. SECURITIES FRAUD CLASS ACTIONS -- Implications For Israeli Investors

U.S. SECURITIES FRAUD CLASS ACTIONS -- Implications For Israeli Investors. Jeremy A. Lieberman, Esq. Pomerantz llp New York City. Morrison V. Nat’l Australian Bank.

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U.S. SECURITIES FRAUD CLASS ACTIONS -- Implications For Israeli Investors

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  1. U.S. SECURITIES FRAUD CLASS ACTIONS --Implications For Israeli Investors Jeremy A. Lieberman, Esq. Pomerantz llp New York City

  2. Morrison V. Nat’l Australian Bank • In June 2010, the US Supreme Court in Morrison v. Nat’l Australian Bankruled that US federal securities laws cover only purchases made on US stock markets; • Morrison has many implications for Israeli investors • If investor purchased shares of company with relationship to US, but on non-US exchange, it should consider filing individual actions. Pomerantz LLP

  3. Group Actions of Interest • In re BP Plc Securities Litigation Relevant Period: January 16, 2007 – May 28, 2010 • US District Court in the Southern District of Texas held that the company misrepresented its safety standards and ability to contain an oil spill • Company represented in filings that it had the ability to contain spill of 491,000 barrels per day; was unable to contain even 20,000 per day • After the spill on April 21, 2010, company claimed that size of the spill was merely 5,000 barrels per day, when internal documents held by the company showed that the spill was 20,000 barrels per day Pomerantz LLP

  4. In re BP Plc Securities Litigation (cont’d) • The Court held that the claims against defendants were meritorious; that in light of Morrison, purchasers of BP shares on the lSE could not be included in the class action. • As a result, US and EU institutional investors that purchased BP shares on the ISE are pursuing individual “opt in” actions. • More than 80 Plaintiffs have filed actions, 25 from the European Union and UK. • On September 30, 2013, Judge Ellison of the Southern District of Texas ruled that Plaintiffs adequately pleaded claims against Defendants under UK common law. Pomerantz LLP

  5. In re BP Plc Securities Litigation (cont’d) • UK/EU Funds That Have Joined Action to Date: 1. MN Asset Management; 2. South Yorkshire Pension Fund Authority; 3. HESTA Superannuation Scheme (Australia); 5. Hadrian Trustees, Ltd. (UK); 6. Electricity Supply Pension Scheme (UK); 7. Meltzer Bank; 8. Generali Investments If Funds Do Not Proactively Join the Action as a Plaintiff, They Cannot Participate in the Anticipated Recovery Pomerantz LLP

  6. Other Actions of Interest • In re Fannie Mae/Freddie Mac “Net Worth Sweep” Litigation • In September 2008, the U.S. Government put Fannie Mae/Freddie Mac into Conservatorship; • The stated purpose of the Conservatorship was to ““to preserve and conserve the [Companies’] assets and property and to put the [Companies] in a sound and solvent condition;” • As part of the Conservatorship, the U.S. Government entered into Senior Preferred Stock Purchase Agreement (“PSPA”) which provided a 10% per annum return on the Treasury’s investment; • Despite that mandate, in August 2012, the Government unilaterally amended the by-laws of the Company, to provide for a “Net Worth Sweep;” • “Net Worth Sweep” provides that the Treasury can take cash equal to the Net Worth of the Companies at any point in time—effectively stripping the Junior Preferred Shareholders of any rights to distributions; • Pomerantz represents a number of institutional investors in a Class Action against the U.S. Treasury and the Fannie Mae/Freddie Mac. Pomerantz LLP

  7. Other Actions of Interest • LIBOR Rate Manipulation • Barclay’s Bank paid $453 million to US and UK regulators to settle claims that it suppressed the LIBOR rate from 2007- 2010 • UBS agreed to a $1.5 billion fine, and admitted to paying brokers to manipulate LIBOR • RBS settled for $612 million, and its Japanese unit admitted to wire fraud • Rabobanksettled Civil Claims Action for $1 billion • Settlements JP Morgan & Citigroup anticipated in coming months. Pomerantz LLP

  8. Libor Rate Manipulation (cont’d) • Sample Incriminating Text Messages: • Senior UBS Trader: ”I KNOW I ONLY TALK TO YOU WHEN I NEED SOMETHING BUT IF YOU COULD ASK YOUR GUYS TO KEEP 3M (Libor Submission) LOW IT WOULD BE A MASSIVE HELP” • Bank B Trader 1: “YES YOU OWE ME THEY ARE GOING 65 and 71” • Senior UBS Trader: “THX MATE YES I DO IN FACT OWE YOU BIG TIME MATE THEY SET 64! THAT’S BEYOND THE CALL OF DUTY Pomerantz LLP

  9. Libor Rate Manipulation (cont’d) • Class Actions filed on behalf of swap purchasers, note holders,and other entities that received lower interest payments due to the suppression of the rate. • Meltzer Investment GMBH and at least five other EU plaintiffshave filed suit in this Action. • Pomerantz is leading a Class Action on behalf of lenders that were damaged by the fraud. Represents the Government Development Bank of Puerto Rico, and Other Lenders. Pomerantz LLP

  10. Pomerantz LLP

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