| Company: | H&R Block, Inc. |
| Ticker Symbol: | HRB |
| Class Period: | Aug-26-03 to Feb-13-08 |
| Date Filed: | Mar-27-09 |
| Lead Plaintiff Deadline: | May-26-09 |
| Court: | Southern District of Illinois |
| Allegations: | |
The suit alleges that H&R Block, Inc., and its subsidiary H&R Block Financial Advisors, Inc., violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which the securities are traded.
Auction rate securities are municipal or corporate debt securities or preferred stocks that pay interest at rates set through periodic auctions. The instruments typically have long-term maturity dates or no maturity date.
The suit filed on Sept. 24, 2008 claims that, pursuant to uniform sales materials and top-down management directives, H&R Block offered and sold auction rate securities to the public as highly liquid cash-management instruments and as suitable alternatives to money market mutual funds. On Feb. 13, 2008, all of the major broker-dealers, including H&R Block, withdrew their support for the auctions. The suit claims that, as a result, investors have been unable to liquidate their auction rate securities.
The lawsuit alleges that H&R Block failed to disclose the following material facts about the auction rate securities it sold to the class:
The auction rate securities were not cash alternatives like money market funds but were instead complex long-term financial instruments with 30-year maturity dates;
The auction rate securities were only liquid at the time of the sale because H&R Block and other broker-dealers were artificially supporting and manipulating the market to maintain the appearance of liquidity and stability;
H&R Block and other broker-dealers routinely intervened in the auctions for their own benefit to set rates and to prevent all-hold auctions and failed auctions;
H&R Block continued to market auction rate securities as liquid investments even after H&R Block and other broker-dealers determined that they would likely be withdrawing support for the periodic auctions and that a freeze of the auction rate securities market would result.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
