SAN DIEGO, June 16, 2016 /PRNewswire/ -- Just hours before a second jury trial was scheduled to begin before the Honorable Jorge L. Alonso in Chicago federal court, the parties in the Household International (now HSBC Finance Corporation) securities class action reached an agreement, subject to court approval, to settle the action for a total of $1.575 billion in cash. The $1.575 billion recovery is a record; it is the largest ever following a securities fraud class action trial, the largest securities fraud settlement in the Seventh Circuit and the seventh largest settlement ever in a post-PSLRA securities fraud case. According to published reports, the case was just the seventh securities fraud case tried to a verdict since the passage of the PSLRA.
The case was filed on August 19, 2002, and a six-week jury trial began on March 30, 2009. On May 7, 2009, a jury returned a securities fraud verdict in favor of the class, finding that Household and the individual defendants, William Aldinger, David Schoenholz and Gary Gilmer, collectively made 17 false and misleading statements concerning the Illinois lender's financial results and operations in violation of §10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. Plaintiffs' counsel, Robbins Geller Rudman & Dowd LLP ("Robbins Geller"), fought the defendants' repeated attempts to derail the litigation after the verdict, which included several post-trial motions to invalidate the verdict, objections to tens of thousands of claims by injured class members, and an appeal to the Seventh Circuit Court of Appeals.
On May 21, 2015, the appellate court upheld the jury's verdict that defendants made false or misleading statements of material fact about the company's predatory lending practices, the quality of its loan portfolio and the company's financial results between March 23, 2001 and October 11, 2002, but sent the case back for a retrial limited to whether the individual defendants "made" certain false statements, whether those false statements caused plaintiffs' losses, and the amount of damages. The retrial was scheduled to begin on June 6, 2016.
"I am very happy with the great job that our lawyers Robbins Geller Rudman & Dowd LLP and everyone at Glickenhaus & Co. did over many, many years to achieve this incredible result. The mills of Justice grind slowly, but sometimes they do grind exceedingly fine," said James Glickenhaus of Glickenhaus & Co., one of three lead plaintiffs appointed by the court in 2002 to represent the class. The International Union of Operating Engineers Local No. 132 Pension Plan and PACE Industry Union-Management Pension Fund also represented the class.
Robbins Geller, lead counsel in this record-breaking recovery, is uniquely equipped to handle trials in securities fraud cases. The Firm's teams of former federal and state prosecutors and other experienced trial lawyers make Robbins Geller distinctive among firms that specialize in plaintiffs' class action litigation and enable it to see cases such as this through trial and appeal.
"This case showcased our willingness to shoulder the burden of sustained litigation," said Robbins Geller lead trial attorney Mike Dowd. "The fact that, after 14 years of hard-fought litigation – including a trial and an appeal – we obtained a record recovery demonstrates our firm's resolve to vindicate the rights of defrauded investors. With my partners Spence Burkholz, Dan Drosman, Luke Brooks and Maureen Mueller, we were ready to try the case to verdict a second time. We moved more than a dozen attorneys, other professionals and support staff to Chicago for the trial, and again for the retrial, and I'm glad their hard work paid off for the class."
The case, Lawrence E. Jaffe Pension Plan v. Household International, Inc., et al., Case No. 02-C-5893, is pending in the United States District Court for the Northern District of Illinois. Robbins Geller, lead counsel in this record-breaking recovery, represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history and was ranked first in both the total amount and number of shareholder class action recoveries in ISS's SCAS Top 50 Report for the last two years. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm's clients. Robbins Geller not only secures recoveries for defrauded investors, it also strives to implement corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http:/www.rgrdlaw.com for more information.
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SOURCE Robbins Geller Rudman & Dowd LLP