Mega Banks Hit with Lawsuits Over MF Global Debacle

Seven banks (NYSEARCA:KBE) among others have been named as defendants in a lawsuit filed Friday afternoon over the October 31 bankruptcy of MF Global Holdings Ltd. The lawsuit accuses Bank of America Corp (NYSE:BAC), Citigroup Inc (NYSE:C), Deutsche Bank AG (NYSE:DB), Goldman Sachs Group Inc (NYSE:GS), Jefferies Group Inc (NYSE:JEF), JPMorgan Chase & Co (NYSE:JPM) and Royal Bank of Scotland Group Plc. (NYSE:RBS) of helping to draft offering documents and sell shares of MF Global Holdings without doing proper due diligence.

Reuters reports, “According to the complaint, the registration statements and prospectuses for about $900 million of MF Global Holdings (NYSE:MF) note offerings this year omitted how the company was using high leverage, investing heavily in risky European sovereign debt, and not properly segregating client assets from its own.”  The lawsuit was brought about by IBEW Local 90 Pension Fund in Connecticut and the Plumbers’ and Pipefitters’ Local #562 Pension Fund in Missouri. MF Global Holdings Ltd. is not a defendant in the suit because of the bankruptcy, but several other parties associated with the company, such as former CEO John Corzine, have been named in addition to the banks.

The lawsuit “seeks damages for investors between February 3, 2011 and October 31, 2011 in MF Global securities, including its 1.875 percent convertible senior notes maturing in 2016, its 3.375 percent convertible senior notes maturing in 2018, and its 6.25 percent senior notes maturing in 2016,” according to Reuters.  The banks named in the suit have either declined to comment or have not responded.

Here’s how these stocks closed the week:

Bank of America Corporation (NYSE:BAC): BAC shares recently traded at $5.78, down $0.02, or 0.34%. They have traded in a 52-week range of $5.13 to $15.31. Volume today was 227,038,577 shares versus a 3-month average volume of 293,308,000 shares. The company’s trailing earnings are $-0.31 per share. Get the most recent company news and stock data here >>

The Goldman Sachs Group, Inc. (NYSE:GS): GS shares recently traded at $91.91, down $0.44, or 0.48%. They have traded in a 52-week range of $84.27 to $175.34. Volume today was 6,229,700 shares versus a 3-month average volume of 8,227,970 shares. The company’s trailing P/E is 13.98, while trailing earnings are $6.57 per share. Get the most recent company news and stock data here >>

Citigroup, Inc. (NYSE:C): C shares recently traded at $26.28, up $0.28, or 1.08%. They have traded in a 52-week range of $21.40 to $51.50. Volume today was 47,280,687 shares versus a 3-month average volume of 56,104,900 shares. The company’s trailing P/E is 7.01, while trailing earnings are $3.75 per share. Get the most recent company news and stock data here >>

Deutsche Bank AG (NYSE:DB): DB shares recently traded at $36.57, up $0.54, or 1.5%. They have traded in a 52-week range of $28.57 to $66.00. Volume today was 2,577,065 shares versus a 3-month average volume of 4,352,800 shares. The company’s trailing P/E is 5.76, while trailing earnings are $6.34 per share. Get the most recent company news and stock data here >>

Jefferies Group Inc. (NYSE:JEF): JEF shares recently traded at $,. They have traded in a 52-week range of $ to $. Volume today was shares versus a 3-month average volume of shares. The company’s trailing P/E is , while trailing earnings are $ per share. Get the most recent company news and stock data here >>

JPMorgan Chase & Co. (NYSE:JPM): JPM shares recently traded at $30.62, up $0.13, or 0.43%. They have traded in a 52-week range of $27.85 to $48.36. Volume today was 39,033,896 shares versus a 3-month average volume of 46,442,200 shares. The company’s trailing P/E is 6.53, while trailing earnings are $4.69 per share. Get the most recent company news and stock data here >>

Royal Bank of Scotland Group plc (NYSE:RBS): RBS shares recently traded at $6.51, up $0.15, or 2.36%. They have traded in a 52-week range of $6.43 to $18.82. Volume today was 510,921 shares versus a 3-month average volume of 47,835 shares. The company’s trailing earnings are $-0.04 per share. Get the most recent company news and stock data here >>

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