US - The $1.2bn City of Miami Firefighters' and Police Officers' Retirement Trust Fund (F&P) sought appointment on September 7, 2001 as lead plaintiff in a securities class action filed in the Pennsylvania federal court against Marconi plc, the beleaguered British telecommunications equipment company.
The class action seeks to recover damages from Marconi and Lord Simpson, chief executive, on behalf of purchasers of the company’s stock in 2001. Marconi, and its officers, allegedly lied to the marketplace about Marconi’s expected 2001 revenues, even as competitors, Nortel and Lucent, issued severe profit warnings and reduced earnings estimates.
Marconi stunned the market in July with a dire profit warning, and yet again on September 4, when it predicted additional interim losses of £227m. Lord Simpson, and Sir Roger Hurn, chairman, have since resigned. Marconi’s stock, which trades in ADR’s on the Nasdaq, plummeted over 50% on the July revenue warning.
US securities laws encourage institutional investors, like public pension funds, to act as lead plaintiffs in securities class action litigation because they are believed to be superior leaders of such complex actions.
If appointed by the Court, Miami F & P will monitor and supervise the litigation against Marconi and could be in a strong position to obtain a substantial recovery for its beneficiaries and other class members. This is the first time that the Miami pension fund sought to take control of a securities class action.
Miami F & P retained the US class action, Miami-based law firm, Milberg Weiss Bershad Hynes & Lerach LLP to represent it against Marconi, along with its regular counsel, Cypen & Cypen in Miami Beach.
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