Thousand of people lost millions of dollars when MCI/Worldcom's share price plummetted, and investors had to "get in line" and hope for any retribution from the bankrupt company. But that may soon change.
Delray Beach, Florida resident Anthony Amodio, a retired MCI employee, lost his life savings when the telecommunications giant went belly-up. But under Florida's "outrage" tort provisions, Mr. Amodio is suing Citigroup and its Salomon Smith Barney brokerage for emotional distress.
"This is the first suit ever filed seeking a mental pain and suffering award for losses suffered by millions of investors who relied on the false advice of Salomon and Citigroup about WorldCom," said Mr. Babbitt, a partner in the plaintiff's trial law firm Babbitt, Johnson, Osborne & LeClainche, P.A.
The lawsuit, filed late last week, alleges that the brokerage company advised Mr. Amodio to hold on to his almost $2 million worth of MCI/Worldcom stock knowing that it was overvalued and would eventually be worthless.
Also targeted in the case is the acquisition of sworn depositions from WorldCom CEO Bernard Ebbers, former Salomon telecommunications analyst Jack Grubman and Citigroup CEO Sanford Weill - representing the first time these key players have faced public scrutiny over their role in the accounting fraud that ultimately brought down the company.
According to the law suit, "The conduct of these Defendants was either intentional or reckless, that is, they intended their behavior when they knew or should have known that severe emotional distress would likely result to the Plaintiff from their behavior...The conduct of these Defendants was outrageous, that is, it went beyond all bounds of decency so as to be regarded as odious and utterly intolerable in a civilized community."
Attorneys believe that if this suit is successful, it will open the doors to recovery of lost investments for thousands of other investors.