Entwistle & Cappucci LLP Files Class Action Lawsuit Against National City Corp. & Officers in Connection with 4.0% Convertibl...
24 December 2008 - 11:30AM
Business Wire
Pursuant to Section 21(D)(a)(3)(A)(i) of the Securities Exchange
Act of 1934 (the �Exchange Act�), Entwistle & Cappucci LLP
(�Entwistle & Cappucci�) (http://www.entwistle-law.com), a
prominent New York law firm specializing in securities litigation,
hereby gives notice that it has filed a class action complaint for
violations of the federal securities laws against National City
Corporation (�National City� or the �Company�), Peter E. Raskind,
David A. Daberko and Jeffrey D. Kelly (�Defendants�) in the United
States District Court for the Northern District of Ohio, Eastern
Division. The lawsuit is brought on behalf of all persons or
entities who purchased National City�s 4.0% Convertible Senior
Notes Due 2011 (�4.0% Notes� or �Notes�) from January 23, 2008
through and including September 30, 2008 (the �Class Period�). The
complaint alleges that the Defendants misrepresented to investors
the quality of approximately $20 billion of National City�s
residential real estate loans and the sufficiency of the Company�s
reserves for the known risks of those loans. Such
misrepresentations were contained in the Company�s quarterly and
annual reports, filings with the Securities and Exchange
Commission, as well as the Prospectus Supplement, which was issued
to investors in connection with the offering (�Offering�) of the
4.0% Notes on or about January 23, 2008. As alleged in the
complaint, National City engaged in undisclosed reckless lending
practices, which consisted of, among other practices, providing
inherently high-risk loans to non-creditworthy borrowers with
minimal or no documentation of income and little or no collateral
on the property. Despite these reckless lending practices,
Defendants represented prior to and during the Class Period that
the Company�s residential real estate loans were prime quality,
conforming loans that were made to borrowers in good credit
standing, that National City had a strong capital position and was
positioned to absorb probable losses inherent in the Company�s loan
portfolio. As a result of the Company�s imprudent lending
practices, National City was ultimately forced to write-off
billions of dollars of defaulting residential real estate loans and
became the subject of regulatory scrutiny by the Office of the
Comptroller of the Currency. Investors began to learn the truth
about National City�s actual lending practices and financial
condition on March 14, 2008, when a Bloomberg News article reported
that Moody�s had downgraded National City�s rating due to likely
mortgage-related losses and noted possible future downgrades. Upon
this news, the price of the 4.0% Notes dropped $254.40 per Note, or
26%, from $981.30 per Note on March 13, 2008 to $726.90 per Note on
March 18, 2008. Subsequent to that announcement, a July 16, 2008
New York Times article, entitled, �Seeing Bad Loans, Investors Flee
From Bank Shares,� noted that despite the Company�s $7 billion
capital raise in May 2008 and assurances that its Tier 1 capital
ratio ranked among the highest in its class, the Company had lost
nearly 90 percent of its value in the last year. Upon this
announcement, the price of the 4.0% Notes dropped an additional
$164.50 per Note, or 21%, from $800.00 per Note on July 9, 2008 to
$635.50 per Note on July 17, 2008. Shortly thereafter, a September
26, 2008 Reuters article, entitled �Wachovia, National City Shares
Tumble on Bailout, WaMu,� reported a 40 percent drop in National
City�s common stock upon investor concern regarding the Company�s
severe mortgage losses as regulators seized Washington Mutual Inc.,
with analysts characterizing National City as a �mortgage financing
company at this point� and �likely either a candidate for FDIC
seizure,� or �a candidate for a dilutive capital raise.� Upon this
news, the price of the 4.0% Notes dropped an additional $242.50 per
Note, or 35%, from $695.00 per Note on September 25, 2008 to
$452.50 per Note on September 30, 2008. As a result of these and
other corrective disclosures, the price of the Company�s 4.0% Notes
fell a total of $607.70 per Note, or 57%, from the initial Offering
price of $1060.20 per Note on January 29, 2008 to $452.50 per Note
on September 30, 2008. Plaintiff seeks to recover damages on behalf
of Class members and is represented by the law firm of Entwistle
& Cappucci, which has significant experience in both
prosecuting and defending complex business, securities and
antitrust actions on behalf of individuals, corporations,
government entities and other institutions. Entwistle &
Cappucci�s attorneys have personally handled numerous private as
well as class action cases resulting in highly significant
recoveries to defrauded investors. The firm currently serves as
Lead Counsel and/or as a member of Plaintiffs� Executive Committee
in many high profile securities class actions currently pending
throughout the country. Entwistle & Cappucci�s work in
representing financial institutions, venture capital and asset
management funds in a variety of complex commercial disputes and
transactions, further positions it to bring a unique perspective to
the prosecution of complex litigation. If you purchased National
City 4.0% Notes during the Class Period, January 23, 2008 through
and including September 30, 2008, you may move the Court to serve
as a lead plaintiff no later than February 23, 2009. In order to
serve as lead plaintiff, however, you must meet certain legal
requirements. If you wish to discuss this action or have any
questions concerning this notice, or your rights or interests with
respect to this matter, please contact plaintiff's counsel, Vincent
R. Cappucci, Esq. of Entwistle & Cappucci LLP, 280 Park Avenue,
26th Floor West, New York, New York 10017, Telephone: (212)
894-7200.
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