NEW YORK, Oct. 17, 2003 (PRIMEZONE) -- Wolf Popper LLP has filed a securities fraud lawsuit against LaBranche & Co., Inc. ("LaBranche") (NYSE:LAB) and G. Michael LaBranche, on behalf of persons who purchased Labranche common stock on the open market from August 19, 1999 through October 15, 2003. The action was filed in the United States District Court for the Southern District of New York, located at 500 Pearl Street, New York, New York 10007, and assigned Civil Action No. 03-8255. The complaint can be viewed on Wolf Popper's website or obtained from the Court.
LaBranche's primary business is operating as a "specialist" in the trading of common stock on the New York Stock Exchange ("NYSE"). As a specialist on the NYSE, LaBranche is required to uphold the rules and requirements of the NYSE and to ensure that the market for each of the stocks it represents remains fair and orderly. However, during the Class Period, LaBranche improperly profited by failing to abide by its "negative obligation." The "negative obligation" requires specialists to refrain from making a trade before executing a customer's trade (a practice called "trading ahead") or from making a trade between customers (a practice called "interpositioning"). Both trading ahead and interpositioning result in the specialist improperly profiting by the amount of the spread between the trades of its two customers.
LaBranche, during the Class Period, repeatedly violated applicable law and regulations by engaging in an illegal scheme to inflate the Company's financial results by illegally "interpositioning" itself between customers or "trading ahead" of customer orders. Thus, throughout the Class Period, LaBranche improperly recognized revenue from its illegal scheme and materially overstated and artificially inflated its financial results.
As a result of defendants' fraud, during the Class Period, LaBranche stock traded as high as $51.45 per share on February 16, 2001. Beginning in April 2003 investigations by the NYSE and SEC were revealed, and in response LaBranche curtailed its improper trading (which had inflated its Class Period financial results), resulting in declining revenue and income. On October 16, 2003 the NYSE announced that it would take disciplinary action against LaBranche. As a result of this announcement LaBranche's stock declined precipitously to close on October 16, 2003 at $11.26 per share.
Class members who desire to be appointed a lead plaintiff in this action must file a motion with the Court no later than December 15, 2003. Class members who are interested in serving as a lead plaintiff in this action, or other persons who have questions or information regarding the prosecution of this action, are urged to call or write:
Wolf Popper LLP James A. Harrod, Esq. 845 Third Avenue New York, N.Y. 10022 Tel.: 212.451.9642 Toll Free: 877.370.7703 Fax: 212.486.2093 Toll Free Fax: 877.370.7704 Email: irrep@wolfpopper.com website: www.wolfpopper.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca