NEW YORK, Dec. 20, 2002 (PRIMEZONE) -- Securities attorney Stanley M. Grossman, senior partner at Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com), commented today on the settlement reached between the nation's top brokerage firms and New York Attorney General Eliot Spitzer. "I applaud Mr. Spitzer and the other members of the negotiating team who investigated and brought these outrageous practices to light," Mr. Grossman said. The settlement, which was announced today, involves nearly a dozen of the nation's largest brokerages who have agreed to pay more than $1 billion to resolve investigations of biased research by stock analysts and the awarding of shares of initial public offering to curry favor with corporate clients.
Mr. Grossman, whose firm represents investors in a number of actions against many of the brokerage firms involved in the settlement, including Merrill Lynch & Co., Solomon Smith Barney and Credit Suisse First Boston, said that the settlement will do much to advance the claims of investors in the class actions who lost money as a result of these practices. The investors, however, are not expected to receive a portion of the billion dollar settlement.
"The information that will be made available out of this settlement, the internal memoranda, letters and e-mails, for example, will be very beneficial to the many thousands of investors in the various ongoing actions that have alleged similar wrongdoing," Grossman said. "That is the case because of the heightened pleading standards imposed by the Private Securities Litigation Reform Act (PSLRA) which Congress passed in 1995. The PSLRA requires that plaintiffs who allege securities fraud violations must state the facts underlying their charge with specificity. This requires detailed factual information often held exclusively in the hands of the wrongdoers. This information, sources have said, will probably be released once the final deal is signed. "The insider documents will serve to reveal the fraud perpetrated behind closed office doors and help recoup some of the money investors have lost relying on these biased and misleading stock recommendations," Mr. Grossman added.
The Pomerantz firm, which has offices in New York and Chicago, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz firm pioneered the field of securities class actions. Today, more than 50 years later, the Pomerantz firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.