Week Adjourned: 3.4.11

Top Class Actions

Glass Ceiling with a $100M Price Tag at CIGNA? Well, this has certainly been a time for discrimination class actions. Filed, that is. Topping the list—Cigna Health Care—based on the number of potential plaintiffs—dollars. This one’s all about gender discrimination—in the form of a hostile work environment and differential treatment of males and females occurs company-wide the suit alleges. 

The complaint, filed by Ms. Bretta Karp, a long-time contracting manager with Cigna, claims that Ms. Karp and other female employees were disriminated against by treating them less favorably than male employees in similar positions and by subjecting all females to intentional, deliberate and wilful discriminatory denials of promotions and pay raises, discriminatory evaluations, disparate terms and conditions of work, harassment, hostile work environments, and other forms of discrimination in callous disregard of their rights.

The complaint further details that CIGNA has created a hostile work environment where male supervisors harass and intimidate female employees, where management has made clear that it favors male employees over women, and where company investigations into complaints made by female employees are either nonexistent or superficial and inadequate.

And the amount sought in damages? $100 million baby—along with litigation costs and expenses and prejudgment interest.  According to the press release on the lawsuit, Cigna pulled in $18.4 billion in 2009.


Top Settlements

Ah, Countrywide… remember them? Who could forget you ask, especially if you’re involved in the lawsuit. Well, a settlement was approved by a federal judge this week for $601.5 million—an amount which is reportedly one of the largest class action settlements stemming from the subprime mortgage crisis.

But all is not perfect in paradise. More than 30 investors, including large institutional shareholders such as the California Public Employees’ Retirement System, Teachers Retirement System of Texas and BlackRock Investment Management LLC, said in October they were opting out. That, in turn, allowed Bank of America to opt out of an earlier settlement in which it would have paid $600 million while KPMG LLP—Countrywide’s former auditors, would have had to pay $24 million. Some reports indicate that there may be further opt-outs by institutional investors while other opt-out investors, including funds belonging to the states of Oregon and Michigan and retirees from Fresno, California, have already sued Bank of America separately.

The suit was filed in 2007, and alleged that Countrywide, now part of Bank of America Corp, misled investors about its financial condition and lending practices, failing to disclose the extent of subprime loans it held. Yes, that old chestnut. It never seems to get tired, unlike the investors. Maybe that’s part of the plan—just wear people down, and they’ll eventually settle…About 970 institutional investors held stock in Countrywide during the period covered by the lawsuit.

One for the Madoff Meter? And then there’s Ameriprise Financial Inc. A settlement was recently reached in the securities fraud class action against them, to the tune of $27 million. It’s not been finalized but if it goes through it could bring some resolution to some 2,000 investors who reports indicate lost some $300 million.

The suit, filed by clients of Ameriprise’s independant-brokerage unit, alleged that the private placement interests sold in two companies—Medical Capital and Provident Royalties—that went bankrupt in 2009—were ponzi schemes. Another chestnut. You know you could argue, at this point, that crime does pay. 

That’s it for this week. See you at the bar.

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