Coughlin Stoia Hails Jury Verdict in Household International Securities Class Action Trial
By Andrew Longstreth
May 07, 2009
Before yesterday, there had been only six securities class action cases tried to verdict in which the alleged fraud took place after the passage of PSLRA. Now there are seven. Late Thursday evening we got word that a federal jury in Chicago had returned its verdict in a seven-year-old case against Household International, now a part of HSBC, and four of its former officers and directors. By the looks of the verdict form, it seems to be a pretty good result for the plaintiffs. Shareholders' counsel, Michael Dowd of Coughlin Stoia Geller Rudman & Robbins, asserted securities fraud claims based on 40 statements Household made about its mortgage lending practices; jurors agreed with the plaintiffs on 16 of them."We are extremely proud of our trial team and pleased that defrauded shareholders have won this historic victory," said Coughlin Stoia partner Patrick Coughlin in a statement e-mailed to the Litigation Daily. "The jury’s verdict is a victory for the millions of Americans suffering as a result of deceptive predatory lending practices and a victory for all investors fighting for greater corporate transparency, honesty and integrity. The verdict is also a testament to our firm's willingness and ability to see a case through on behalf of our clients, despite facing adversaries with tremendous power and resources."
We e-mailed Thomas Kavaler of Cahill Gordon & Reindel, who represented Household at trial, but didn't hear back. (As we previously reported, Cahill was the third firm HSBC used in this case.) In a statement, HSBC said it "strongly disagrees with those findings of the jury that were for the plaintiffs" and would seek to have them thrown out. (It's worth noting that the last time plaintiffs won a securities class action verdict--$277.5 million against the Apollo Group in January 2008--the trial judge later overturned it.)
According to the Securities Litigation Watch blog, the case will now head to the damages phase. That could be a bit harrowing for the defendants. At one point, the plaintiffs were reportedly seeking $1 billion in damages.
