Law Firm To Initiate Class Action Against NAB

Post by Sharat on April 15, 2009 · Under Company News, Equities, banking, investments · Comment

Australian banking major, National Australia Bank (NAB) may face a class action law suit brought by shareholders who bought their stock prior to the bank announcing its troubled assets writedowns last year.

The report which originated from The Australian Financial Review suggests that law firm Maurice Blackburn is contacting both retail and institutional shareholders, who purchased equity in NAB between January 1st and July 25th 2008.

On July 25 last year, the bank wrote down $830 million in further losses related to its US Sub Prime mortgage assets, with then NAB chief declaring the writedown reflected “unprecedented” global credit conditions.

Only a couple of months earlier in May 2008, NAB issued a statement suggesting that it had taken appropriate measures to value its assets, that it had made conservative provisions for its Sub Prime assets, playing down the risk it was carrying as a result of holding those investments.

The report in The AFR says plaintiff law firm Maurice Blackburn will provide documents to shareholders that state the writedown of asset valuations should have been made public much earlier.

“These CDOs (collateralised debt obligations) are all documented, they are marketable and they are priceable. [NAB] was perfectly capable of working out what the true value of those CDOs were at the time, and they either didn’t work it out, or did but didn’t tell the market,” the firm’s chairman Bernard Murphy said.
“At the time…everyone was awash with concerns about the level of exposure of these so-called toxic debts,” Mr Murphy said.

NAB declined to comment on the report, saying it had not received any correspondence from Maurice Blackburn.

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