Maurice Blackburn opens up NAB class action
The law firm Maurice Blackburn has invited investors who held National Australia Bank (NAB) shares between 1 January 2008 and 25 July 2008 to join a class action against the bank.
The invitation comes at the direction of the Supreme Court of Victoria, and will be published in three national newspapers today.
The class action is based on the allegation that NAB failed to properly disclose all material information relating to its collateralised debt obligation (CDO) exposure within the period.
"Thousands of investors who bought shares in that period were, we say, misled and suffered losses as a result," said Jacob Varghese, principal in the class action.
Investors who wish to join the class action must do so by 12 October 2012, or they may lose their rights to take action to recover losses at any future date.
Two-hundred and fifty institutional and retail investors are currently members of the class action, which was first mooted in 2008. Court proceedings were launched in November 2010, and the matter is scheduled for trial in December 2012.
In July 2008, NAB suffered the biggest drop in its share price since 1987, when it revealed it had lost $1 billion in the US mortgage crisis, according to a Maurice Blackburn statement.
NAB acquired $1.2 billion in CDOs in 2006, which had a heavy exposure to residential mortgage-backed securities and became 'toxic debt' in 2007 and early 2008.
"In early May 2008, NAB told the market that it had provisioned $181 million in respect of its $1.2 billion CDO exposure. At that time, the bank led investors to believe that $181 million was a very conservative provision," according to the statement.
"But in July 2008, only two months later, NAB increased its total provision to $1.1 billion, or 90 per cent of the value of the CDOs. In the following days NAB's share price plunged by nearly $6," the statement said.
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