Posted on 08/08/2002 9:22:56 PM PDT by Libloather
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Announces Class Action Lawsuit Against Citigroup, Inc.
Thursday August 8, 12:16 pm Eastern Time
Press Release
SOURCE: Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
WASHINGTON--(BUSINESS WIRE)--Aug. 8, 2002--On August 7, 2002, an investor represented by the law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (www.cmht.com) filed a class action suit against Citigroup, Inc., (NYSE: C - News; "Citigroup"), Sanford I. Weill and Todd Thomson (collectively, the "Defendants") in the United States District Court for the Southern District of New York.
The lawsuit was filed on behalf of all persons who purchased, converted, exchanged or otherwise acquired the common stock of Citigroup between July 24, 1999 and July 23, 2002, inclusive (the "Class Period").
The complaint alleges that the Defendants violated the federal securities laws. Specifically, the complaint alleges that, during the Class Period, the Defendants failed to disclose material facts concerning Citigroup's relationship with Enron Corp. ("Enron"). The complaint charges, for example, that Citigroup never disclosed it was structuring financial deals for Enron so that Enron could falsify its financial statements and defraud its investors. After Enron's collapse, Citigroup continued to misrepresent its potential Enron-related exposure by failing to disclose the true extent of its potential legal liability arising out of its transactions with Enron.
As a result of the Defendants' failure to disclose the true nature of Citigroup's relationship with Enron, Citigroup's stock price was artificially inflated during the Class Period, trading as high as $57. Upon news that the Senate Committee found evidence that Citigroup was involved in Enron's collapse, the stock fell to $27 on trading of 121 million shares. A copy of the complaint can be obtained from the clerk's office of the court or from Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has significant experience in prosecuting investor class actions and actions involving financial fraud. The firm has offices in Washington, D.C., Seattle and New York and is active in major litigation pending in federal and state courts throughout the nation. You may visit the firm's website at www.cmht.com.
The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total over a billion dollars.
If you purchased Citigroup common stock during the Class Period, you may move for appointment as Lead Plaintiff on or before September 23, 2002.
If you have any questions with regard to this notice or otherwise, please contact:
Mark S. Willis, Esq.
or
Robert C. Smits
Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
1100 New York Avenue, N.W.
West Tower, Suite 500
Washington, D.C. 20005-3964
Telephone: 888/240-7775 or 202/408-4600
E-mail: mwillis@cmht.com or rsmits@cmht.com
Contact:
Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
Mark S. Willis or Robert C. Smits
888/240-7775 or 202/408-4600
mwillis@cmht.com or rsmits@cmht.com
Wednesday August 7, 5:22 pm Eastern Time
Press Release
SOURCE: Democratic National Committee
Statement by DNC Chairman McAuliffe on the Economy
WASHINGTON, Aug. 7 /PRNewswire/ -- The following is a statement by DNC Chairman McAuliffe on the Economy:
"Today, the President and Vice President spoke out about the economy, but put forward no new ideas or policies that will have a positive impact on the economy.
"Vice President Cheney, however, patted himself on the back for the administration's success in talking down the economy and passed the blame for the recession.
"I guess the era of responsibility means President Bush blames Senator Daschle and Vice President Cheney blames President Clinton.
"President Bush, in Mississippi near the now bankrupt WorldCom headquarters, spoke out against corporate fraud with a wink and a nod to the private sector. As reported today, administration officials, following President Bush's call, are already busy weakening provisions of the corporate responsibility bill President Bush 'called for.'
"It is time for this administration to get serious about the U.S. economy. Stop playing the blame game. Take responsibility. Set an example by coming clean on your past business dealings.
"Mr. President and Mr. Vice President, 'I told you so' is not an economic plan."
The Commerce Department's painful report last week that the national economy is worse than anticipated obscured the document's startling revelation. Hidden in the morass of statistics, there is proof that the Clinton administration grossly overestimated the strength of the economy leading up to the 2000 election. Did the federal government join Enron and WorldCom in cooking the books?
Through all of President Bill Clinton's last two years in office, the announced level of before-tax profits was at least 10 percent too high--a discrepancy rising close to 30 percent during the last presidential campaign. Most startling, the Commerce Department in 2000 showed the economy on an upswing through most of the election year, while in fact it was declining.
Although a political motive for Democratic cooking of the government's books is there, nobody--including Bush administration officials--alleges specific wrongdoing. Nor is there any evidence. Estimation in 2000 was conducted by career public servants who are doing the same jobs today (working under a highly political Democrat in the Commerce Department). Nevertheless, such discrepancy in earnings statements by corporate executives today would warrant a congressional subpoena.
The Commerce Department's Bureau of Economic Analysis estimates before-tax profits of domestic nonfinancial corporations quarterly. Revised figures last week showed profits were really lower by 10.7 percent, 12.2 percent, 15.2 percent and 18 percent for the four quarters of 1999. In 2000, this gap became a chasm. The revised quarterly profits for the election year are lower than the announced figures by 23.3 percent, 25.9 percent, 29.9 percent and 28.2 percent.
Most startling, original estimates showed a generally rising profit outlook for the two years preceding the election. Starting with $503.7 billion in the last quarter of 1998, the quarterly estimates rose steadily to $543.8 billion in the fourth quarter of 1999 and then took off in the first two quarters of 2000 to $574.9 billion and $606.6 billion, leveling off to $602.9 billion in the third quarter (before falling to $527.3 billion in the fourth quarter after the election).
Last week's revised returns reflect not only different numbers but a different trend (starting at a much lower level of $473 billion). Profits actually fell through much of 2000, dropping from $449.7 billion to $422.4 billion for the second half (before slipping to $372.8 billion).
How could there be this big of a discrepancy? How could the government have reported steadily rising profits when they actually peaked in 1998?
''The gap is a bit larger than usual, but not really out of line,'' Brent Moulton, associate director at the Bureau of Economic Analysis, told me. Moulton, who was in charge of both the old figures and the new revision, said the problem was the two-year delay in obtaining corporate tax returns (reflecting changes in telecommunications and business services).
Moulton's boss in 1999-2000 was one of the Clinton administration's most politically astute economists: Undersecretary of Commerce Rob Shapiro, a pioneer ''New Democrat'' and early friend and supporter of Bill Clinton. I asked him flatly: ''Did you cook the books?''
Shapiro laughed it off, asserting that the Bureau of Economic Analysis is ''the most nonpolitical, nonpartisan agency in the government.''
That begs the question of whether the bureau's very political, very partisan management chief should have known the bureaucrats were on the wrong track.
''No,'' said Shapiro, ''2000 looked very good to us.'' He dismissed the early reports as ''an econometric projection based on estimates.''
The result: headlines in 2000 spewing false information of corporate profits growing at 25 percent, bolstering the stock market and holding up the state of the economy as the election approached. That is the underpinning for the Democratic myth that a growing and vibrant American economy has been sabotaged by President Bush's tax cut. (''We lost the opportunity for long-term economic growth,'' says House Minority Leader Richard Gephardt).
If the government's books were not purposely cooked in the same way as corporate accounts, there still remains the question of how the government could be so wrong.
The Bureau of Economic Analysis may well be free of partisan tilt, but its incompetence can cast a long political shadow.
Robert Novak appears on CNN's ''Capital Gang'' at 6 p.m. Saturday and ''Novak, Hunt and Shields'' at 4:30 p.m. Saturday and 10 a.m. Sunday. E-mail: novakevans@aol.com
And, this data is the same data that is used to make projections as to the future surplus to the treasury.
So, all of the talk about the future surplus was total BullS##t, and all the crowing about the tax cut cutting into a non-existent future surplus is all Bulls##t, and the Bush administration macro-economic impact of the ten year tax reduction is all based on Bulls##t.
So, now as we overspend our budget, sometime during the next six years, the republicans will need to rescind a large portion of the tax reduction, and Bush will take the blame.
Folks, we have finally found the clinton legacy!
Bad.
I learned a while back during the seemingly nonstop mutual fund manager shift/change/hiring/firing that the company or fund only does as well as those in charge of it. Citigroup is run by Rubin. He belongs in an orange jumpsuit. Sell.
Gotta love it...MUD
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