Another class action against AMEX has been filed...

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AmexTrainer
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Another class action against AMEX has been filed...

Postby AmexTrainer » Fri Feb 27, 2009 11:50 pm

I got a letter in the mail today that concerned me for a second. You never like to see letters from attorneys in your mailbox. I felt a little better after I opened it and saw I wasn't the defendant. However, American Express was listed. This is Gainy & McKenna out of New York City (known for their class action work) and they are filing pretty much the same suit that the firm out in California filed. This one is much better written than the other one. I used to write these things and they aren't exactly easy, but that California complaint looks like it was written by a first year law student. This one is much more professional and much shorter. It is only two pages instead of thirty something. I don't need the whole history of the company before you get to the point in a lawsuit. sheesh... lol Some of this complaint reads the same, but it is so much shorter that it just looks more professional.

My wife and kids are in California and I don't have much to do right now, so I thought I'd type a few sections of the complaint in here since I can't find it anywhere online.

Count 1

During the Class Period, defendants carried out a plan, scheme and course of conduct which was intended to and, throughout the Class Period, did deceive the investing public, including plaintiff and other Class members, as alleged in this Complaint and caused plaintiff and other members of the Class to purchase American Express stock at artificially inflated prices. in furtherance of this unlawful scheme and course of conduct, defendants, and each of them, took the actions set forth in this Complaint.

Defendants employed devices, schemes, and artifices to defraud; made untrue statements of material fact and/or omitted to state material facts necessary to make the statements made not misleading; and engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company's common stock in an effort to maintain artificially high market prices for American Express stock in violation of section 10(b) of the 1934 Act and Rule 10b-5. All defendants are sued as primary participants in the wrongful and illegal conduct and fraudulent scheme and course of business charged in this Complaint.


here's the good part....

As a result of the dissemination of the materially false and misleading information and failure to disclose material facts, as set forth above, the market price of American express stock was artificially inflated during the Class Period. Relying directly or indirectly on the false and misleading statements made by defendants or upon the integrity of the market in American Express stock, plaintiff and the other members of the Class purchased American Express stock during the Class Period at artificially high prices and were damaged thereby.

Count 2 is pretty much the meat of the other lawsuit. The differences between the two are few, but this new one is much more clear in what they are alleging.

I honestly don't know why they sent this to me. I'm an employee of American Express, so I guess that could be why. I have two American Express cards as well, but I don't think that would qualify me to receive this. I wonder if every employee is going to get one of these... We never did hear anything from corporate about the suit that was filed last week, but I gave it to my director to follow up on. Now that this one has also been filed, I would expect to hear something about it. What I'm really shocked about is that this information is nowhere to be found on the internet yet. I live in Utah and that is pretty far from New York. Surely there are other people who got this letter yesterday or the day before. It was dated the 24th, so why haven't more people heard about it? I'll keep you all posted. This seems like a great forum to get answers and find good stuff like this, so I figure I'll just add to the pile. :)


bozell
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Postby bozell » Sat Feb 28, 2009 4:46 am

how did they get your name and address to send it to? this lawsuit is not going anywhere. it sounds like a bunch of ambulance chasers looking for quick payday. you can't sue a company because the economy is in the crapper.

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Postby AmexTrainer » Sat Feb 28, 2009 10:50 am

I'm not sure how they got my information. I sent them an email asking that. I'm an employee, so maybe they sent it to everybody in the company. I've got two cards, so maybe they sent it to all card members. I would imagine more people would have heard about it if that were the case. Who knows... Maybe it is some elaborate phishing scam intended to get me to put all my personal information on a form and mail it back to them. I'm still doing research on this...

Actually, you can sue a company for sucking. If the company misrepresented the value of their stocks and then when the truth came out the stocks went through the floor, then the investors have every right to sue. You might feel differently if you had lost thousands of dollars due to their stock prices dropping 65%. This is something that is partially related to the economy, but only because the poor economy suddenly exposed the truth as the complaint puts it. It says Amex was taking on high risk card members assuming they wouldn't default, and then surprise surprise, they defaulted when the economy blew up. That's why they call it 'risk' I suppose.

Let's put it this way... Imagine how you would feel if you bought a house for $200,000 that you intended to turn around and sell right away. Then the day you signed the papers and it became yours the value dropped to $70,000 because everybody found out the basement flooded every time you flushed the toilet and the foundation was cracked down the middle along with all the drywall and carpet needing to be replaced due to the massive number of leaks in the roof? How would you feel having to float that $130K for however long it took for the value to climb back up? What if you were paying interest on that $130K the whole time the house was worthless? Wouldn't you want to take a piece out of the mortgage broker and lender and appraiser who convinced you it was a good investment?

Yes, this happens all the time when the sharks smell blood in the water, but that doesn't mean they don't have a good case. If they can prove that American Express misrepresented the value of their stocks to investors and inflated them based on those misrepresentations, then it will be bad news indeed. Just look at what happened to Enron... The same thing happened to them with their stocks (among other things) and look where they are now. Their only staff that exists is only there to deal with all the litigation that is still going on.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sat Feb 28, 2009 10:00 pm

I don't think lawyers have access to customer or employee lists if they file a lawsuit. Otherwise all of these class action lawsuits would be doing that to increase the plaintiff pool.

If these lawsuits are or more less the same, how do people decide which to join? I know they're different states but thought the first complaint covered all jurisdictions?
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fffresh
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Postby fffresh » Mon Mar 02, 2009 4:17 pm

If they are successful in suing American Express we will see a flood of similar suits against all of the financial institutions.

They are all more or less guilty of extending credit in situations they should not have.

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The Fuzz
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Postby The Fuzz » Mon Mar 02, 2009 5:17 pm

The fact that two firms have filed the same suit within days of each other indicates that there isn't a lot of coordination in the legal field to bring down AMEX. They sound like ambulance chasers to me.

Stock holder information is public record, so if you have any shares in any company, your information is out there to whoever wants it. I'm not sure how they go about obtaining entire lists of shareholders (that first suit said there were nearly a billion and a half shares out there, so that would be a long list) but it is available to anyone seeking to make a buck. And bucks there are out there... AMEX is still worth many billions of dollars despite the terrible stock prices (down to about $11 per share today). If they can get the difference between what the stock was at and what it is now because of bad decisions made by people who should have known better, then it would end American Express and every other bank who is in the same situation. Somehow I don't think any court is going to hold a bank responsible for the actions of the US Economy when they didn't really have all that much to do with it.

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Postby Floppster » Wed Mar 04, 2009 5:56 pm

I think people just don't get it. The stock market has always been a risky investment. If you loose screw yourself. Next time go with a CD or pay more attention to the financial markets... Wasn't really a big surprise...
Intellectuals solve problems. Geniuses prevent them.
- Albert Einstein 1879-1955



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