Hot News!
• Tea Party leader gets grilled by NAACP membership
On today's date in The Beacon archives, we published:
•Smitherman still saying the issue is about a “streetcar” (2009)•More on Amy Goodman’s Arrest and the Struggle for a Free Media (2008)
•Journalist Amy Goodman Unlawfully Arrested At RNC (2008)
•Seizing Illegal Guns—Thinking About 2% (2007)
•Information or Advertisements? (2007)
•Nick Lachey: “I have never supported George W. Bush.” (2007)
Contact Us
v mail: (513) 685-0678
e mail: click here
Tuesday, July 29, 2008
5/3 Lawsuit and Buyout Rumors
Posted by The Dean of Cincinnati
Photo courtesy of here.
Did I miss the news? Where is The Enquirer’s coverage of the class action lawsuit against 5/3 Bank? According to a recent press release, “The Complaint alleges that the defendants violated federal securities laws by issuing material misrepresentations to the market concerning Fifth Third Bancorp’s financial condition and prospects, thereby artificially inflating the price of Fifth Third Bancorp securities.” This could be huge news for the Cincinnati bank. And one must wonder how it relates to the other 5/3 rumor: Are they about to sell to another bank, like Wachovia?
I have heard people talking about the alleged 5/3 buyout, and I have heard names like Bank of America, Wells Fargo, and Wachovia thrown into the mix. But only Wachovia has a blue and green logo (pictured above) that seems remotely similar to 5/3’s recently redesigned logo:
So if I had to place money on the rumor, I’d go with Wachovia buying out 5/3. But with the news of the class action lawsuit, one must wonder if the suit could have an affect on 5/3’s sale—assuming, of course, there is any truth to this.
If a buyout were to occur, I think the biggest hit to the region would involve the relatively new operations center built in Madisonville. If a bank like Wachovia had its own central operations location, and if the work got streamlined into that operation, the Madisonville center would become a huge ghost should it become abandoned. I don’t know what other business would move into such an enormous facility.
Anyway, if an entity like 5/3 gets sued in a class action suit, I think that constitutes news. People have been sending me links on this for some time, but I haven’t caught a local story about it. Why not? And if there is truth to the buy out rumors, isn’t that the kind of thing the local media should cover, like The Enquirer or The Business Courier? Perhaps their silence means the rumors are not true. Or, perhaps the silence over the class action story indicates a hands-off approach to negative stories about 5/3 Bank here in Cincinnati.
• Share This Article! | Listen to this article |
|  |
Register
Anonymous comments are allowed, but you can create an account above to stamp your name and to avoid typing the anti-spam code.
If you are not familiar with our rules for leaving comments, click here! The Cincinnati Beacon is not responsible for the contents of any comments. Comments do not represent the views of the moderators of The Cincinnati Beacon.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License.
29 Jul 2008 at 10:56 am | #
The rumors are one thing, but it does seem a bit odd that the Enquirer didn’t cover the class action suit.
29 Jul 2008 at 11:05 am | #
Because the logos are similar????!!!
29 Jul 2008 at 11:16 am | #
You expect the Enquirer to report news?
Come on Jason! You know better since your site has more hits than their weak attempt at a blog!
Think about this- they send someone to cover a MAJOR sporting event in Mason, that 40% of the proceeds go to CCHMC, and as a spectator you can be within 10 feet of these great atheletes who will talk and sign autographs….and they send someone to cover the event who doesn’t understand or play tennis? Now that is great assignment coverage!
And you think that they would touch something as sacred as 5/3rd!!
Gotta Love Gannett!
29 Jul 2008 at 12:12 pm | #
You should also mention that 5/3’s Chief Financial Officer, Chris Marshall, resigned May 1 after about 2 years on the job. No reason was given in the Business Courier story on the resignation.
29 Jul 2008 at 06:48 pm | #
anon,
No. Re-read the story, please. Pay attention.
29 Jul 2008 at 07:41 pm | #
Actually someone at the Enquirer doesn’t seem to like 5/3 b/c most of the articles I found are at best neutral.
29 Jul 2008 at 08:41 pm | #
Dean,
My Wife and I are friends with an older couple (they are in their 80’s, and very active) who have had their income severely curtailed by the drop in 5/3rd’s stock price. The Wife retired from 5/3rd and most of her pension is in the form of 5/3rd stock. the collapse of 5/3rd’s stock is adversely thousands of 5/3rd retirees (and those nearing retirement).
5/3rd Corp. is in a nosedive and The Paper Of Record for our entire region has hardly said a word about it.
30 Jul 2008 at 12:36 am | #
Does this have anything to do with all their relentless spamming?!
30 Jul 2008 at 04:04 am | #
I live off my wife and don’t have any friends. I don’t know why any 80-somethings would keep such a large percentage of their assets in stocks, much less one stock. But hey, at least they worked for it. Unlike me who lays around all day doing nothing.
30 Jul 2008 at 09:52 am | #
Jason—
I’m not referring to the class action or the purchase rumors. I’m referring to:
“I have heard people talking about the alleged 5/3 buyout, and I have heard names like Bank of America, Wells Fargo, and Wachovia thrown into the mix. But only Wachovia has a blue and green logo (pictured above) that seems remotely similar to 5/3’s. So if I had to place money on the rumor, I’d go with Wachovia buying out 5/3.”
Sorry, but that’s crazy.
Re the coverage of its business issues: 5/3’s stock price has fallen off a cliff in the last several weeks, but it’s been on a serious downward trend for five years. Anyone who claims to be surprised just hasn’t been paying attention.
30 Jul 2008 at 06:38 pm | #
That done due diligilence has been going on at 5/3- aka- can you say- Fire Sale!
31 Jul 2008 at 12:49 am | #
Jeff Capell 2:04am:
I know that you have been out drinking (yet again), but you need to enroll in a refresher course in the right Wing Hack Detective School, because you are wrong, worng wrong, yet again. Here’s a hint for you: I live in Cheviot, and work for a large employer in Erlanger, KY. I make more-or-less as much as my Wife makes.
By the way, when is the last time that you ever had a date?
Love,
CincyCapell
05 Aug 2008 at 01:31 pm | #
.
“By the way, when is the last time that you ever had a date? Love, CincyCapell”
Jeff Capell is always hanging with, ‘sweet jean’s’, Colon Rink. They have a common bond of concealing their little pistols !
Seems the Colon has been giving Jeff some instructional lessons.
.
07 Aug 2008 at 07:11 pm | #
Cincy Mat- It is quite possible that this couple worked for 5/3 for many years. It is quite common, certain with you Cincinnati institutional Companies, like P & G, 5/3 , Macy’s ( and formerly Federated) to have the employee’s pensions in their own corporations stock. For years it actually worked well. P & G lifelong employee’s , from Janitor up, would reitre basically millionares from their acumulation of ” pension stock”. So they were probably comfortable in the belief that these companies actually cared about them, and they actually did. But times change, and the profit, and stock price, tied to CEO compensation, put the emphisis on the stock price.
I have been screaming about this issue for a while now. We even bought a couple of shares to be able to see information we might not have been otherwise been able to see.
Is the lawsuit real? yes, without question. Did they ” file false and misleading material facts in relation to the stock price and some new offerings? No question. The allegation focuses primarily that they mistated thier tier 1 captial, and their exposure ( not the sectors THEIR OWN ) exposure to bad loans mortagages etc etc. They sure as heck did. After the offerings, and HIGHLY ENCOURAGING their employees to purchase this class of stock , they denied that they had a capital problem, but at the same time, were issuing this stock to raise capital because they knew that they were going to take a big hit. 7.9 BILLION in write-offs. So how can you say everything is great, and at the same time, issue stock because you know you are going to take a huge hit? They lied. Period. Failure to state a material fact” in relation to any stock is one of the biggest no-no’s you can make. SEC really frowns on it. Yes, this is sector wide, but the problem is that they, along with just about everyone, were trying to limit disclosureas, you guessed it, stock price will drop, and so will their paychecks.
I can easily go back to the beginning, and go right down the list of events that lead them to today. They are not even today, being honest with their exposure to bad loans .
5/3 WAS a pretty good stock to own, as would P & G as they had a great dividend. One would hope that you can trust the people you work for to do the right thing. Alot of 5/3 employees, former and those there today, held that belief. How long has this company been here? It’s like P & G, they take care of you.
But like most banks, the unleashing of the laws that regulated them, they got greedy. Fee’s, loans to everybody, etc etc. Well, we all know how that went.
The recent divesture of the largest holder of 5/3 stock, which WAS reported by the C.E. , but was very fluffy. They did say they sold the stock for ” strategic reasons” but it was the cut in the dividend. I would partially agree with that being they are an insurance company, but with the HUGE drop in the stock price, one would think they might hold it if things were rosey, and the bad news was passed. They did not. They had a seat on the board, so they KNOW the true condition of 5/3. In the same article, the CEO of 5/3 said ” we should be alright”. what kind of statement is that? It was a C.E statement. They are not alright.
They did have this on Cincy.com, and had remarks open. MEP and I were watching how long it took for them to take it down, as I ripped the CE for not alerting the MANY in Cincinnati who were/are employee’s who hold the stock in their pension plan, and why the CE wasn’t reporting the suit? I wrote that this was the ONLY chance for them to recover thier money and one would think they would let their readers know about the suit, the allegations, and their right to file a claim. They yanked them in about 30 minutes and closed the story and comments. I even wrote the 2 reporters who wrote the stories. No response.
The fact is that 5/3 knew they were going to have this huge write-off. They knowing filed a class of securities to raise capital, lying to investors and their employees about the issue of stock, and the financial condition of the company, and are still doing it to this day!. They are not done with the write -off either, and it is going to be worse. They are trying to sell assets ( redbank road) and other card services, but no go.
ANY shareholder, and I will get the exact dates, held the common stock, or bought these issues, should IMMEDIATELY join the suit, or seek an attorney as if you do not, you money is gone. What they did is illegal as one can get under SEC rules, and 5/3 screwed you if you listened to them and bought it for your 401K or other retirement plan. I mean they bent you over a chair scred you, and they did it knowingly.
Fo those that do not believe it, look at insiders sales. Why would the executives be selling, while asking you to buy if they didn’t know. They call these “crossed trades” and they are illegal.
If all these people would just disclose the losses,ALL of them, then we could start turning around the Economy, and get rid of the inflationary low interest rates. Because they are not, it gets worse and worse. The sad part is that they may not even know what they have lost, as they have used the same asset so many different times, they dont know.
A person would go to the bank, get a loan for a house. That house backed the loan. Today, that house may be backing 5,000 loans. Nobody knows. We are talking trillions, yes trillions of dollars that just suddenly dissapeared out of someones pocket. It will turn out to be the taxpayers pocket.
The bottom line is that if you owned the stock, join the suit. It is your only chance to get any money back. This is going to cost 5/3 a ton, and i see no other way out except for someone buying them.
The C.E. is nothing short of a total failure for putting “relationships” before the citizens of this city. Not just on this issue , but this would be the biggest…. yet. So many people , including present and past employees that gave this bank their lives of work, only to be taken like this, I really hope someone goes to jail. It is criminal. The C.E. Obviously is what it is. It is not a newspaper, and as i told the reporters who wrote the stories, I hope you can face your neighbor.
Final lesson here. Don’t put all your eggs in one basket. The days of that are over. Think Enron. Everyones retirement wiped out in an instant.
Thank you for finally writing something about this. Alot of people have been hurt badly by this. Like the 80 year old couple. not only did they lose the value of the stock, they lost the dividend income which was probably a big part of what they lived on. Shame on 5/3, and shame on the CE
07 Aug 2008 at 07:18 pm | #
PS The Madisonville Card processing center is one of the assets they are trying to sell.