NEW YORK, July 16, 2008 (LAWFUEL) — Roy Jacobs & Associates
announces that it has filed a class action alleging violations of the
federal securities laws on behalf of purchasers of FCStone Group, Inc.
(hereinafter “FCStone” or the “Company”) (Nasdaq:FCSX) securities
during the period from April 10, 2008 through July 9, 2008 (the “Class
Period”). The defendants include the Company and members of senior
management. The suit is pending in the United States District Court for
the Western District of Missouri.
For further information, please contact Roy L. Jacobs, Esq. toll-free
at 1-888-884-4490 or by e-mail to rjacobs@jacobsclasslaw.com. You may
also visit the firm’s website at www.jacobsclasslaw.com.
As set forth in the Complaint the Company entered into an important
hedge transaction (the “Hedge”) which, for the first two quarters of
fiscal 2008, generated net income to the Company of approximately $5
million. Most of this income was generated in the second quarter ended
February 29, 2008. In a conference call on April 10, 2008, the Company
concealed the true nature of the Hedge, by failing to reveal that
should there develop a significant spread between the U.S.-based Fed
Funds interest rate (the “Feds Funds Rate”) and the London Inter-Bank
Rate (“LIBOR”), the Hedge would decline in notional value. Based on
what the market was told, the investing public viewed the hedge as
simply one to protect the Company from falling interest rates, and not
one which was crucially dependent upon the spread between the Fed Funds
Rate and LIBOR not widening.
However, in the third quarter of 2008 a significant spread arose
between the Fed Funds Rate and LIBOR. As a result, the Hedge was
declining so swiftly in notional value that the Company sold the Hedge,
which sale wiped out any Hedge based gains for the first two quarters
of fiscal 2008.
On July 10, 2008, FCStone shocked the market by announcing third
quarter earnings per share of 28 cents versus the expected 47 cents.
Much of the deviation was due to the decline and sale of the Hedge. In
addition, the Company announced previously unmentioned and significant
bad debt expenses due to volatility in the cotton markets which had
occurred in March. Nothing was said about this volatility and its
adverse effects on the April 10, 2008 conference call. Upon revelation
of this adverse news FCStone shares dropped over 41% wiping out over
$300 million in shareholder value.
If you bought FCStone shares during the period from April 10, 2008
through July 9, 2008, you may qualify to serve as Lead Plaintiff on
behalf of the Class. You may serve in this position even if you have
sold your shares. All motions for appointment as Lead Plaintiff must be
filed by September 15, 2008.
If you are interested in discussing your rights free of charge, please
contact Roy L. Jacobs. Mr. Jacobs will speak with you at no cost or
obligation. You may also sign up at our website at
www.jacobsclasslaw.com.
