{"id":722,"date":"2010-07-20T23:17:53","date_gmt":"2010-07-20T23:17:53","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2010\/07\/securities_class_action_lawsui"},"modified":"2022-03-09T16:00:47","modified_gmt":"2022-03-09T22:00:47","slug":"securities-class-action-lawsui","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/securities-class-action-lawsui\/","title":{"rendered":"Securities Class Action Against Morgan Stanley by Xerox and Kodak Retirees Dismissed by Appeals Court"},"content":{"rendered":"

\t\t\t\tThe U.S. Second Circuit Court of Appeals in New York has upheld a lower court’s ruling to dismiss that the securities class action<\/a> filed by Eastman Kodak Co. and Xerox Corp. against Morgan Stanley<\/a>. The plaintiffs, retirees from both companies, are accusing the broker-dealer of advising them that if they retired early their investments would be enough to support them during retirement. They also claim that the investment bank persuaded them to open accounts that cost them the bulk of their wealth. According to the plaintiffs’ attorney, the retirees gave up job security and employment rights after they were told that if they retired early they could avail of a 10% withdrawal rate from their individual retirement accounts. <\/p>\n

However, upon retiring, the retirees that invested lump-sum retirement benefits with Morgan Stanley experienced “disastrous” value declines. Also, they had invested with two Morgan Stanley broker, Michael Kazacos and David Isabella, that were later barred from the securities industry. Last year the broker-dealer settled FINRA charges over the two men’s activities by paying over $7.2 million.<\/p>\n

The appeals court says that because of the 1998 Securities Litigation Uniform Standards Act, the plaintiffs are precluded from pursuing class state law claims, including misrepresentation claims. While the statute lets plaintiffs file lawsuits in state court to get around 1995 Private Securities Litigation Reform Act’s securities fraud pleading requirements, federal preemption of class actions claiming “misrepresentations in connection with the purchase or sale of a covered security” are allowed. The three-judge panel also said that because the retirees waited too long to file their securities fraud lawsuit, they cannot raise other federal securities law claims.<\/p>\n

Related Web Resources:<\/strong>
\nXerox, Kodak retirees lose Morgan Stanley appeal<\/a>, Reuters, June 29, 2010
\nMorgan Stanley to Pay More than $7 Million to Resolve FINRA Charges Relating to Misconduct in Early Retirement Investment Promotion, FINRA, March 25, 2009
\n1998 Securities Litigation Uniform Standards Act, The Library of Congress Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. Second Circuit Court of Appeals in New York has upheld a lower court’s ruling to dismiss that the securities class action filed by Eastman Kodak Co. and Xerox Corp. against Morgan Stanley. 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