Posern v.
Prudential Securities, Inc.
Kirtland
& Packard and Lehman Law Office Announces Class Action Lawsuit
Against Prudential Securities, Inc.
Kirtland &
Packard LLP ( http://www.KirtlandPackard.com) and Lehmann Law Office
today announced that a securities class action has been commenced
in the United States District Court for the Northern District of
California on behalf of California residents who, while customers
of Prudential Securities, Inc (“Prudential”), and in
the course of the relationship, engaged in the investment process
known as writing put options in not less than three years prior
to the filing of the original complaint in this matter, which was
February 4, 2003. An amended complaint (“the complaint”)
in this action was filed on May 22, 2003. The case number is C03-507
SC and is before the Hon. Samuel Conti.
The complaint
alleges that as a matter of corporate policy, Prudential with deliberate
recklessness encouraged its brokers to promote writing put options
for its customers. A person who “writes” a put agrees,
in return for a small fee, to purchase a stock from any investor
who purchases said put during a period of specified duration in
the future at a specified price, at the purchaser’s option,
even if the stock sells for a lower price on the open market. As
alleged in the complaint, it is a high risk strategy.
The complaint
further alleges that while Prudential was writing puts on behalf
of its customers, Prudential and its parent company, Prudential
Insurance Company of America, were buying puts as a means of hedging
against potential losses from market price declines in equities
which they held for their own accounts.
The complaint
alleges that the above actions created an undisclosed conflict of
interest between Prudential and its customers because Prudential
was buying puts in the same markets in which it was encouraging
its customers to write puts. Prudential was, in effect, protecting
itself and its parent company by transferring their own investments
risks to its customers. Furthermore, the complaint alleges that
since Prudential was itself following the opposite strategy of what
it was advising its customers, thus with deliberate recklessness
giving advice that it did not believe.
Based on the foregoing, the complaint seeks damages, restitution
and injunctive relief based on claims that Prudential breached its
fiduciary and statutory duty to class members and that Prudential
violated Section 10(b) of the Securities Exchange Act of 1934.
If you are a
member of this class you may, no later than sixty days from today,
move the Court to appoint you as lead plaintiff through counsel
of your own choice. You may also do nothing and remain an absent
class member.
A copy of the complaint and amended complaint are available at http://www.KirtlandPackard.com/cases/prudential.
If you have any questions concerning this matter, please contact
plaintiffs’ counsel, Harry Lehmann at 415-897-2121 or Michael
L. Kelly at 310-536-1000, or they can be contacted though KirtlandPackard.com.
Other
Resources
This page contains documents pertaining to the case cited
above. All documents are in Adobe Acrobat (PDF) format. If you do
not have Acrobat installed on your computer, you can download it
for free at this
address.
Getting
More Information
If you would
like more information about this case, please fill out the form
below. You will then be notified by email whenever new documents
are posted to this page.
You can also
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to this website. To join the notification list, simply send a blank
email message to this address: posern@KirtlandPackard.com.
For questions about any of our ongoing investigations or existing class action cases, or to inquire about your own claim, please send email to ClassActionInfo@KirtlandPackard.com.
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