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August 4, 2005
District Investors Who Lost Money on Stocks May Receive Restitution Under Settlement on Tainted Research
Washington, DC - Lawrence H. Mirel, Commissioner of the District of Columbia's Department of Insurance, Securities and Banking (DISB), announced today that Washington, DC investors who lost money on stocks could receive restitution as a result of a Global Settlement involving tainted stock research.
A $433 million pool was created by court order to compensate investors who suffered losses on 50 stocks, including local stocks WorldCom Corp., XO Communications, Inc., CAIS Internet Inc., and United Therapeutics Corp., that had been touted by dishonest Wall Street securities analysts. The pool was announced as a "historic settlement" in April 2003, when the DISB joined New York Attorney General Elliot Spitzer, the North American Securities Administrators Association, Inc. (NASAA), the US Securities and Exchange Commission (SEC) and four other state securities regulators who had filed lawsuits against a dozen of the biggest investment firms on Wall Street challenging the firms on their practice of routinely recommending stocks of companies that were their investment bank clients, even though they had doubts about whether those stocks were good investments.
William H. Pauley III, United States District Court Judge for the Southern District of New York appointed Francis E. McGovern, a Duke University law professor who specializes in resolving big disputes, to be the Distribution Fund Administrator for the Global Research Analyst Settlement Distribution Fund.
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