National City (NYSE:NCC)
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Pursuant to Section 21(D)(a)(3)(A)(i) of the Securities Exchange Act of
1934 (the “Exchange Act”), Entwistle & Cappucci LLP (“Entwistle &
Cappucci”) (http://www.entwistle-law.com),
a prominent New York law firm specializing in securities litigation,
hereby gives notice that it has filed a class action complaint for
violations of the federal securities laws against National City
Corporation (“National City” or the “Company”), Peter E. Raskind, David
A. Daberko and Jeffrey D. Kelly (“Defendants”) in the United States
District Court for the Northern District of Ohio, Eastern Division. The
lawsuit is brought on behalf of all persons or entities who purchased
National City’s 4.0% Convertible Senior Notes Due 2011 (“4.0% Notes” or
“Notes”) from January 23, 2008 through and including September 30, 2008
(the “Class Period”).
The complaint alleges that the Defendants misrepresented to investors
the quality of approximately $20 billion of National City’s residential
real estate loans and the sufficiency of the Company’s reserves for the
known risks of those loans. Such misrepresentations were contained in
the Company’s quarterly and annual reports, filings with the Securities
and Exchange Commission, as well as the Prospectus Supplement, which was
issued to investors in connection with the offering (“Offering”) of the
4.0% Notes on or about January 23, 2008.
As alleged in the complaint, National City engaged in undisclosed
reckless lending practices, which consisted of, among other practices,
providing inherently high-risk loans to non-creditworthy borrowers with
minimal or no documentation of income and little or no collateral on the
property. Despite these reckless lending practices, Defendants
represented prior to and during the Class Period that the Company’s
residential real estate loans were prime quality, conforming loans that
were made to borrowers in good credit standing, that National City had a
strong capital position and was positioned to absorb probable losses
inherent in the Company’s loan portfolio.
As a result of the Company’s imprudent lending practices, National City
was ultimately forced to write-off billions of dollars of defaulting
residential real estate loans and became the subject of regulatory
scrutiny by the Office of the Comptroller of the Currency.
Investors began to learn the truth about National City’s actual lending
practices and financial condition on March 14, 2008, when a Bloomberg
News article reported that Moody’s had downgraded National City’s
rating due to likely mortgage-related losses and noted possible future
downgrades. Upon this news, the price of the 4.0% Notes dropped $254.40
per Note, or 26%, from $981.30 per Note on March 13, 2008 to $726.90 per
Note on March 18, 2008. Subsequent to that announcement, a July 16, 2008 New
York Times article, entitled, “Seeing Bad Loans, Investors Flee From
Bank Shares,” noted that despite the Company’s $7 billion capital raise
in May 2008 and assurances that its Tier 1 capital ratio ranked among
the highest in its class, the Company had lost nearly 90 percent of its
value in the last year. Upon this announcement, the price of the 4.0%
Notes dropped an additional $164.50 per Note, or 21%, from $800.00 per
Note on July 9, 2008 to $635.50 per Note on July 17, 2008. Shortly
thereafter, a September 26, 2008 Reuters article, entitled “Wachovia,
National City Shares Tumble on Bailout, WaMu,” reported a 40 percent
drop in National City’s common stock upon investor concern regarding the
Company’s severe mortgage losses as regulators seized Washington Mutual
Inc., with analysts characterizing National City as a “mortgage
financing company at this point” and “likely either a candidate for FDIC
seizure,” or “a candidate for a dilutive capital raise.” Upon this news,
the price of the 4.0% Notes dropped an additional $242.50 per Note, or
35%, from $695.00 per Note on September 25, 2008 to $452.50 per Note on
September 30, 2008.
As a result of these and other corrective disclosures, the price of the
Company’s 4.0% Notes fell a total of $607.70 per Note, or 57%, from the
initial Offering price of $1060.20 per Note on January 29, 2008 to
$452.50 per Note on September 30, 2008.
Plaintiff seeks to recover damages on behalf of Class members and is
represented by the law firm of Entwistle & Cappucci, which has
significant experience in both prosecuting and defending complex
business, securities and antitrust actions on behalf of individuals,
corporations, government entities and other institutions. Entwistle &
Cappucci’s attorneys have personally handled numerous private as well as
class action cases resulting in highly significant recoveries to
defrauded investors. The firm currently serves as Lead Counsel and/or as
a member of Plaintiffs’ Executive Committee in many high profile
securities class actions currently pending throughout the country.
Entwistle & Cappucci’s work in representing financial institutions,
venture capital and asset management funds in a variety of complex
commercial disputes and transactions, further positions it to bring a
unique perspective to the prosecution of complex litigation.
If you purchased National City 4.0% Notes during the Class Period,
January 23, 2008 through and including September 30, 2008, you may move
the Court to serve as a lead plaintiff no later than February 23, 2009.
In order to serve as lead plaintiff, however, you must meet
certain legal requirements.
If you wish to discuss this action or have any questions concerning this
notice, or your rights or interests with respect to this matter, please
contact plaintiff's counsel, Vincent R. Cappucci, Esq. of Entwistle &
Cappucci LLP, 280 Park Avenue, 26th Floor West, New York, New York
10017, Telephone: (212) 894-7200.