Declaration of Former U.S. District Court Judge Phillips

[In the Citigroup case, Former United States District Court Judge Layn R. Phillips submitted this Declaration Regarding Approval of Settlement dated November 19, 2012.  I sent an email to Mr. Phillips about his Declaration. Mr. Phillips emailed back saying I should serve the email on the parties, which I did, with a letter to the Court.  I then sent a letter to the Court in the Bank of America case calling this development in the Citigroup case to the Court's attention.  I further sent a similar letter to the Court in the Regions Morgan Keegan case.  Set forth below are my three letters and the two emails ]


[letter (in email form) sent to Court in Regions Morgan Keegan case]

From: RDShatt@aol.com
To: jbernstein@labaton.com, rcs@cabaniss.com, pfruin@maynardcooper.com, blatham@bassberry.com, larry.polk@sutherland.com, kevinlogue@paulhastings.com
Sent: 3/29/2013 9:51:43 A.M. Central Daylight Time
Subj: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv
VIA US MAIL
Clerk of the Court
United States District Court for the Western District of Tennessee
Clifford Davis/Odell Horton Federal Building
167 North Main Street, Room 242
Memphis, Tennessee 38103
Re: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv
Supplement to Objection of Robert Shattuck
To the Honorable United States District Court for the Western District of Tennessee:
I am an objector in this case and have previously sent my objection to the Court and to counsel by U.S. mail.
As indicated in my objection, this case, and the case In re Citigroup Securities Litigation Master File No. 07 MDL CIV 9901 (SHS), pending in Southern District of New York, have a certain legal similarity, and I have submitted an amicus objection in the Citigroup case that is very similar to my objection in this case.
I wish to report something from the Citigroup case which I think the Court should inform itself about in this case.
In the Citigroup case, Former United States District Court Judge Layn R. Phillips submitted to the Court a Declaration Regarding Approval Of Settlement, dated November 19, 2012, which Declaration may be found on the Internet at this URL: http://www.citigroupsecuritiessettlement.com/docs/Judge%20Phillips%20Declaration.pdf. I sent an email to Mr. Phillips asking some questions related to his Declaration, Mr. Phillips emailed me back saying I should serve my email on the parties in the Citigroup case to give them an opportunity to comment before he responded, and I proceeded to serve my email on the parties.
As my objection indicates, there is second similar case also pending in the Southern District of New York, IN RE BANK OF AMERICA CORP. Master File No. 09 MDL 2058 (PKC), and I sent a letter to the Court in that case, calling attention to the foregoing development in the Citigroup case.
Appended below are my letter to the Southern District of New York in the Bank of America case, my letter to the Southern District of New York making the requested service in the Citigroup case, the email I sent to Mr. Phillips, and Mr. Phillips' reply email to me.
As discussed in my objection, in all three cases, windfall gains were obtained by selling shareholders who sold shares at "artificially inflated prices," these windfall gains corresponded to losses to purchasing shareholders who paid the artificially inflated prices, the lawsuits are not intended or designed to recover, and by and large will not recover, the windfall gains that are in the pockets of the selling shareholders. This case is different from the Citigroup and Bank of America cases because the settlement in this case is not coming in substance from the closed end fund shareholders (as best I can determine) and thereby effectuating in substance a shifting around of losses among those who had losses; rather the recovery in substance is coming from Regions shareholders who did not benefit from the alleged wrongdoing (i.e., did not receive the windfall gains that corresponded to the losses caused by the alleged wrongdoing).
My objection urges the Court, In deciding whether or not to approve the settlement, to consider how the windfall gains are not being recovered from the selling shareholders who got the gains, that there is no deterrent value to this lawsuit, and this lawsuit should be treated as among real parties in interest who have no culpability, some of whom had losses and others of which are innocent bystanders who received no benefit. I have suggested to the Court that it request briefs from the parties discussing these matters.
Whatever comments may be made by the parties in the Citigroup case about my email, and whatever response is made by Mr. Phillips, could be helpful to the Court in this case regarding the foregoing points.
Regions shareholders probably have a greater reason to object to the settlement than shareholders of the closed end funds (such as myself), but Regions shareholders are not members of the plaintiff class. Regions ought to be arguing this matter on behalf of the Regions shareholders.
I have been in contact with the Alabama Attorney General and the Alabama Securities Commission urging them to speak up to the Court. I don't know whether they will.
If any further developments occur that I think the Court should be advised about, I will make further submissions.
I am sending paper copies of this email by US mail to the Court and to the counsel for the parties in this case as specified in the Notice, as well as sending this email electronically to such counsel per the above email addresses.
Respectfully submitted,
Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 25223
(205) 967-5586

[letter (in email form) sent to Court in Bank of America case]

From: RDShatt@aol.com
To: mwb@blbglaw.com, steven@blbglaw.com, rkaplan@kaplanfox.com, ffox@kaplanfox.com, dkessler@ktmc.com, gcastaldo@ktmc.com, bkarp@paulweiss.com, dkramer@paulweiss.com, asoloway@paulweiss.com, lphillips@irell.com
Sent: 3/26/2013 2:40:23 P.M. Central Daylight Time
Subj: Bank of America Corp., SDNY Master File No. 09 MDL 2058 (PKC)
BY US MAIL
United States District Court
Southern District of New York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007-1312
IN RE BANK OF AMERICA CORP. Master File No. 09 MDL 2058 (PKC)
SECURITIES, DERIVATIVE, AND
EMPLOYEE RETIREMENT INCOME
SECURITY ACT (ERISA) LITIGATION
:::::
ECF CASE

To the Honorable United States District Court of the Southern District of New York:

I am an amicus objector in this case and have previously sent to the Court by U.S. mail my amicus objection.
This case, and the case In re Citigroup Securities Litigation Master File No. 07 MDL CIV 9901 (SHS), also pending in the Court, have substantial legal similarity, and I have submitted an amicus objection in the Citigroup case that is the same as my amicus objection in this case.
I wish to report something from the Citigroup case which I think the Court should inform itself about in this case.
In the Citigroup case, Former United States District Court Judge Layn R. Phillips submitted to the Court a Declaration Regarding Approval Of Settlement, dated November 19, 2012. I sent an email to Mr. Phillips asking some questions related to his Declaration, Mr. Phillips emailed me back saying I should serve my email on the parties in the Citigroup case to give them an opportunity to comment before he responded, and I proceeded to serve my email on the parties. Appended below is my letter to the Court making the requested service in the Citigroup case, and also the email I sent to Mr. Phillips and Mr. Phillips' reply email to me.
It appears that Mr. Phillips has been involved in the negotiations for settling this case. Although I do not see that Mr. Phillips submitted a Declaration to the Court in this case, I think, because of the legal similarity of the cases, it would behoove the Court to inform itself about my email in the Citigroup case, any comments the parties in the Citigroup case make about my email, and such response as Mr. Phillips makes after the parties have had an opportunity to comment.
The plaintiffs' lawyers in this case, in their Joint Declaration to the Court dated February 19, 2012, brag about the tremendous recovery they are making for the plaintiff class. I have been contending that windfall gains have gone into the pockets of stockholders who sold during the artificially inflated period, these windfall gains correspond to the losses caused to the purchasers of the stock as a result of the wrongdoing; the lawsuit does not seek recovery, and there will not be recovery (except possibly to a small, illogical extent), of these windfall gains going into the pockets of selling shareholders, and there will be only, in substance, a shuffling around of losses. Thus, in short, I believe the claims of the lead plaintiffs' and their counsel about the recovery being made in this case are false are misleading.
Also, the lead plaintiffs have been touting the deterrence benefit from their class action lawsuit. See this press release As laid out in my objection, I contend there is no purpose of deterring wrongdoing that is served by the lawsuit.
Those are my contentions. They form the basis of my email to Mr. Phillips in the Citigroup case. The parties in Citigroup are being given the opportunity to comment, and Mr. Phillips indicates that he will make response in due course.
I am sure the Court can appreciate my desire that the Court inform itself about my email, any comments of the parties, and such response as Mr. Phillips' makes to my email in the Citigroup case.
I am sending paper copies of this email by US mail to the Court and to the counsel for the parties in this case as specified in the Notice (and to Mr. Phillips), as well as sending this email electronically to such counsel (and to Mr. Phillips) per the above email addresses.
Respectfully submitted,
Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 25223
(205) 967-5586

[my letter to the Court making service of my email in Citigroup]

BY US MAIL
United States District Court
Southern District of New York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007-1312
IN RE CITIGROUP SECURITIES Master File No. 07 MDL CIV 9901 (SHS)
LITIGATION
:::::
ECF CASE
REQUEST OF FORMER UNITED STATES DISTRICT JUDGE LAYN R. PHILLIPS
FOR SERVICE TO BE MADE ON PARTIES
To the Honorable United States District Court of the Southern District of New York:
I sent the below email to Mr. Phillips regarding his Declaration to the Court, dated November 19, 2012, and Mr. Phillips sent me a reply email (also below) that said I should serve my email on the parties to give them an opportunity to respond before Mr. Phillips comments. Accordingly, I am sending paper copies of this email by US mail to the Court and to the counsel for the parties as specified in the Notice (and to Mr. Phillips), as well as sending this email electronically to such counsel and to Mr. Phillips per the above email addresses.
Respectfully submitted,
Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 25223
(205) 967-5586


[my email to Mr. Phillips]

From: RDShatt@aol.com
To: lphillips@irell.com
Sent: 3/24/2013 1:42:59 P.M. Central Daylight Time
Subj: Citigroup - your Nov. 19, 2012 Declaration
Dear Mr. Phillips,
I am an amicus objector in the Citigroup Securities Litigation. You can find my amicus objection here.
I am writing to you concerning your Declaration to the Court. I don't know whether, in the extensive briefs the parties submitted to you, there was any argumentation about the two basic contentions I make in my objection, and I am taking the opportunity to call those contentions to your attention by this email.
I. No recovery of windfall gains; reallocation of losses
My analysis is that, to an unknown extent and in an unknown aggregate amount, selling shareholders during the artificially inflated period will walk away with windfall gains that correspond to losses incurred by purchasing shareholders, such windfall gains are either entirely out of the reach of the Court, or else the "recovery" (offset) of such windfall gain disregards the relative amounts of the windfall gains obtained by the selling shareholders as a result of the alleged wrongdoing, and, instead of "recovery" from selling shareholders who had windfall gains from the alleged wrongdoing, there will be in substance a shifting around and reallocation of losses among buying shareholders who incurred losses and other shareholders who had no windfall gain and suffered no loss (e.g. shareholders who bought their shares before the start of the artificially inflated period and held their shares throughout the period). Further, my analysis is that, not only is such unknown at the time of the settlement agreement, only purchasers who have losses from transactions during the artificially inflated period will submit claim forms, and the information provided by those claim forms will reveal little about how much selling shareholders will walk away with windfall gains as just described.
At one end of the possible spectrum, if all shareholders at the start of the artificially inflated period sold out during the artificially inflated period, 100% of the losses experienced by the purchasing shareholders from the alleged wrongdoing would be windfall gains in the pockets of the selling shareholder that would be entirely outside the reach of the Court, and be 100% kept by the selling shareholders. The purchasing shareholders who incurred the losses and other shareholders who purchased after the end of the artificially inflated period (and who had no gain or loss from the alleged wrongdoing) would, in substance in this scenario, contribute to the settlement fund in proportion to their shareholdings; some of the purchasing shareholders who had greater losses will have their losses effectively reduced, some who have lesser losses will have their losses effectively increased, and some losses will effectively get allocated to shareholders who had no gain or loss from the alleged wrongdoing.
At the other end of the spectrum, it is possible that there were no selling shareholders who sold out completely during the artificially inflated period, all shareholders in substance contribute to the settlement fund in proportion to their shareholdings, shareholders who had net gains from their transactions during the artificially inflated period will not participate in the settlement fund, and shareholders who had net losses from their transactions during the artificially inflated period can, after their effective contribution to the settlement fund, receive an allocation from the settlement fund that may be greater than the pro rata amount they effectively contribute to the settlement fund (i.e., reducing their overall loss), or the allocation may be less than the pro rata amount they effectively contribute to the fund (i.e., increasing their overall loss). Other shareholders (such as shareholders who owned shares at the start of the artificially inflated period, who held their shares throughout the period, and who had neither gain nor loss from the alleged wrongdoing) effectively get some losses allocated to them.
The respective amounts of windfall gains that selling shareholders obtain and will be allowed to keep as a result of the alleged wrongdoing is disregarded under the settlement. To highlight this, consider shareholders A, B and C, who each owned 100 shares at the start of the artificially inflated period. Say shareholder A sells 90 shares at the peak price during the artificially inflated period, shareholder B sells 90 shares at a much lower price during the artificially inflated period, and shareholder C holds his 100 shares throughout the artificially inflated period. None of A, B and C have losses from transactions during the artificially inflated period and so cannot share in the settlement amount. Shareholders A and B, who had, respectively, a large windfall gain and a much smaller windfall gain, will in substance make equal pro rata contributions to the settlement fund based on their 10 share ownership, and A will retain a much larger amount of windfall gain, and B a smaller amount of windfall gain. Shareholder C, who had neither a windfall gain nor a loss from the alleged wrongdoing, will make a pro rata contribution to the settlement fund based on a 100 share ownership (i.e., a much larger contribution than A or B).
(It is worth noting at least parenthetically here that the aggregate of the losses in all the scenarios, which losses are getting reallocated as described, are increased by plaintiffs' and Citigroup's attorneys fees.)
Am I correct that it was entirely unknown at the time of the settlement (and will never be known), the extent to which selling shareholders who sold during the artificially inflated period will walk away with windfall gains that are beyond the reach of the Court (if the shareholders completely sold out) or the amounts of windfall gains that they are allowed to keep will be kept in disregard of the relative amounts of their respective windfall gains, and the extent to which there is any "recovery" of those windfall gains will is unknown, and instead of "recovery" of windfall gains, there is effectively a reallocation of losses among purchasers who had losses or to shareholders who had no gain or loss from the alleged wrongdoing?
If my analysis is correct, did the parties argue in their respective briefs submitted to you about such an analysis and how it should affect what is a fair and reasonable settlement amount (or whether there should be a settlement amount at all)? Is the Court aware of the foregoing analysis? Do you think your declaration should have discussed the foregoing analysis for the benefit of the Court? Do you think you should modify your declaration to the Court?
II. No deterrent effect; case in substance among non-culpable real parties in interest
My second main contention is that the lawsuit in substance should be considered nothing more than a case of unjust enrichment among innocent, non-culpable real parties in interest, and there is no purpose of deterring wrongdoing that is served by the lawsuit.
Did the parties in their respective briefs submitted to you make any argument about the validity of the foregoing contention and whether the same should affect what is a fair and reasonable settlement? Do you think the Court views the litigation one way or the other regarding such contention. Do you think your declaration should have discussed the foregoing contention for the benefit of the Court? Do you think you should modify your declaration to the Court?
Thank you.
Rob Shattuck
Birmingham, AL

[reply email from Mr. Phillips to me]

From: LPhillips@irell.com
To: RDShatt@aol.com
Sent: 3/24/2013 6:46:37 P.M. Central Daylight Time
Subj: Re: Citigroup - your Nov. 19, 2012 Declaration

This email should be served on the parties to the litigation. After they have commented, I will respond. 

Alabama Securities Commission; Attorney General

From: RDShatt@aol.com
To: chris.rhodes@asc.alabama.gov
CC: asc@asc.alabama.gov, constitutentaffairs@ago.state.al.us, communications@rsa-al.gov, legislative@rsa-al.gov, ri@nasaa.org, jmcpherson@naag.org
Sent: 3/20/2013 7:14:28 A.M. Central Daylight Time
Subj: Continued request for Alabama Securities Commission to speak up
Dear Mr. Rhodes,
I am continuing to follow up on recent communications I have made to the Alabama Securities Commission (and parallel communications to the Alabama Attorney General).
In the Regions Morgan Keegan closed end funds class action litigation, I have, as a shareholder, completed submission of my written objection to the Court. You may find my written objection here.
I continue to solicit the Alabama Securities Commission, in its general oversight role as a protector of Alabama investors and of the securities market in Alabama, to formulate its views about what I have been endeavoring to communicate to the Commission and as particularly involved in the locally connected Regions Morgan Keegan lawsuit. If the Commission concludes that I have raised meritorious points that the Court in the case should give consideration to, I would believe an avenue can be found to put forth to the Court a statement of the Commission's views. Please let me know if the Commission is interested in doing this.
It behooves mentioning that Alabama governmental retirement funds, through their securities investments, have a material interest, and further they may be solicited to serve as lead plaintiffs and become, wittingly or unwittingly, propagators of these lawsuits that the investment world (and the general public) should find highly objectionable.
In 2008, there was one of these lawsuits involving Monster Worldwide, Inc., in which a governmental retirement plan was a lead plaintiff, and I disseminated this email Why aren't government retirement systems screaming bloody murder?, including to the Retirement Systems of Alabama. I received a reply from the RSA, which you can find here, but no follow up discussion occurred.
Misguided beliefs on this subject persist. Take a look at the recent press release announcing the pending Citigroup settlement, in which the pension plan proponents and Ohio Attorney General DeWine effusively pat themselves on the back in lauding the recovery being made of lost shareholder assets and the deterrence message sent to others. These are false and misleading claims.
The country's economy is still struggling, investment is cried out for to help create jobs, government retirement plans are under great stress, and yet the Courts tool along allowing these detrimental predations by the plaintiffs' lawyers. I hope the Commissioner, or the Alabama Attorney General, will speak up about this.
Thank you.
Sincerely,
Rob Shattuck
Birmingham

From: RDShatt@aol.com
To: chris.rhodes@asc.alabama.gov, constitutentaffairs@ago.state.al.us
CC: asc@asc.alabama.gov, communications@rsa-al.gov, legislative@rsa-al.gov, ri@nasaa.org, jmcpherson@naag.org
Sent: 3/23/2013 7:23:53 A.M. Central Daylight Time
Subj: FYI Bank of America and Citigroup
Dear Mr. Rhodes and Mr. Loftin,
This is in follow to my email on Wednesday.
The Regions Morgan Keegan closed end funds litigation is small compared to the Bank of America and Citigroup cases. I did not have standing to object as a shareholder in the latter cases and could only submit amicus objections. Very possibly the Retirement Systems of Alabama and other governmental plans in Alabama are members of the plaintiff classes in Bank of America and Citigroup.
I hope the RSA has had an opportunity to revisit this subject that I raised with them in 2008.
The settlement hearing in Citigroup is April 8th and in Bank of America is April 5th While the deadlines for members of the plaintiff classes to submit objections in those cases are past, I would like to think there are avenues for the Alabama Attorney General and the Alabama Securities Commission (and even the RSA) to get their views before the Southern District of New York. The Court and the parties are well on notice about the issues in question from my amicus objections.
As explained in my Regions Morgan Keegan objection, there is a difference between that case and the Bank of America and Citigroup cases, and such difference probably makes objections in Bank of America and Citigroup more compelling.
I hope the Attorney General and/or the Securities Commission will see fit to speak up.
Thank you.
Sincerely,
Rob Shattuck
Birmingham

From: RDShatt@aol.com
To: chris.rhodes@asc.alabama.gov, constitutentaffairs@ago.state.al.us
CC: asc@asc.alabama.gov, communications@rsa-al.gov, legislative@rsa-al.gov, ri@nasaa.org, jmcpherson@naag.org
Sent: 4/2/2013 8:03:36 P.M. Central Daylight Time
Subj: Citigroup, Bank of America and Regions Morgan Keegan cases
Dear Mr. Rhodes and Mr. Loftin,
I know it is getting late in the day for the Alabama Attorney General and the Alabama Securities Commission to speak up concerning the Citigroup, Bank of America and Regions Morgan Keegan class action lawsuits that I have been emailing you about.
There has been a development in those cases I wish to report to the Attorney General and to the Securities Commission in case it will affect things.
In the Citigroup case, Former United States District Court Judge Layn R. Phillips submitted to the Court this Declaration Regarding Approval Of Settlement, dated November 19, 2012. A week ago, I sent an email to Mr. Phillips asking some questions related to his Declaration. Mr. Phillips emailed me back saying I should serve my email on the parties in the Citigroup case to give them an opportunity to comment before he responded, and I proceeded to serve my email on the Citigroup parties.
Mr. Phillips was also involved in the negotiations in the Bank of America case. Although it did not appear Mr. Phillips submitted a Declaration to the Court in the Bank of America case as in the Citigroup case, the legal similarity of the cases prompted me to supplement my objection to the Court in the Bank of America case. I sent a letter to the Court and the Bank of America parties urging the Court to inform itself about my email in the Citigroup case, any comments the parties in the Citigroup case make about my email, and such response as Mr. Phillips makes after the Citigroup parties have had an opportunity to comment.
I especially mentioned how the plaintiffs' lawyers, in their Joint Declaration to the Court in the Bank of America case, had touted the tremendous recovery they were making for the plaintiff class. I restated my contention that windfall gains went into the pockets of stockholders who sold during the artificially inflated period, these windfall gains corresponded to the losses caused to the purchasers of the stock as a result of the wrongdoing; the Bank of America lawsuit does not seek recovery, and there will not be recovery/offset (except possibly to a small, illogical extent), of these windfall gains going into the pockets of selling shareholders; and there will be only, in substance, a shuffling around of losses. I said, in short, the claims of the lead plaintiffs' and their counsel about the tremedndous recovery being made in the case were false and misleading.
Also, I mentioned how the lead plaintiffs touted the deterrence benefit from their class action lawsuit in their press release, and restated my contention there was no purpose of deterring wrongdoing that was served by the Bank of America lawsuit.
After sending my letters to the Court in the Citigroup and Bank of America cases, I further sent a supplemental letter to the Court in the Regions Morgan Keegan case.
My above three letters, my email to Mr. Phillips, and his reply email to me can all be found here.
My email interchange with Mr. Phillips is suggestive that my contentions were not put forth by any of the parties, and, if my contentions have merit and should be considered in the litigation, it is fair to infer there was a failure of adequate representation of all legitimate interest and concerns in the litigations. I have tried to take steps to speak on behalf of such interests and concerns, but I am not an entirely adequate and appropriate person for doing that. It seems to me the Alabama Attorney General and/or the Alabama Securities Commission are better for fulfilling that role.
Thank you.
Sincerely,
Rob Shattuck


From: ConstitutentAffairs@ago.state.al.us
To: RDShatt@aol.com
Sent: 4/3/2013 9:02:20 A.M. Central Daylight Time
Subj: RE: Citigroup, Bank of America and Regions Morgan Keegan cases
Dear Mr. Shattuck:
I received your email regarding the Citigroup, Bank of America, Regions, and Morgan Keegan class action lawsuits. In my original response to you I directed you to the Alabama Securities Commission. While I appreciate the information you are providing, it is unclear what action you are requesting the Office of the Attorney General take. However, Alabama state law prohibits our office from providing private citizens with legal advice, legal opinions, or legal representation. We can only recommend that you consider discussing your concerns with a private attorney, who may provide you with legal advice and any representation that may be appropriate to address your concerns.
If you wish to obtain an attorney referral, you may contact the Alabama State Bar’s Lawyer Referral Service toll-free by calling 1-800-392-5660. If you feel you cannot afford an attorney you may contact Alabama Legal Services by calling 1-866-456-4995.
Thank you again for contacting the Office of the Attorney General. I hope you find the above information helpful.
Sincerely,
Clay J. Loftin
Director of Constituent Affairs

___________________________

Clay J. Loftin

Office of the Alabama Attorney General

From: RDShatt@aol.com
To: ConstitutentAffairs@ago.state.al.us
Sent: 4/3/2013 10:16:47 A.M. Central Daylight Time
Subj: Re: Citigroup, Bank of America and Regions Morgan Keegan cases
Thank you for replying, Clay.
I think I have been fairly clear that I am endeavoring to get before the Court a general public interest related to deterrence of corporate wrongdoing and also a general investor interest concerning these lawsuits. If these are legitimate concerns that the Court ought to consider, and the Court is failing to consider the same, I would say the class action lawsuit system is working poorly, and further it should not have to devolve on a private citizen such as myself to undertake getting the Court to consider the general public and general investor interest. What is within or without the statutory authority of Attorney General Strange to do in advocating for the deterrence of corporate wrongdoing and the protection of the public, I leave to the AG office to decide (and it would seem that the AG office has decided here). I have basically not had a response from the Alabama Securities Commission. After I send this email, I am going to send another email to the recipients of my original email below (including yourself), in which I will give a link to this news story from Monday: Judge Questions Fairness Of Citigroup's $590 Million Settlement.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: chris.rhodes@asc.alabama.gov, ConstitutentAffairs@ago.state.al.us, asc@asc.alabama.gov, communications@rsa-al.gov, legislative@rsa-al.gov, ri@nasaa.org, jmcpherson@naag.org
Sent: 4/3/2013 12:28:36 P.M. Central Daylight Time
Subj: Judge Questions Fairness Of Citigroup's $590 Million Settlement
In follow up to my previous emails, please note this news article from Monday: Judge Questions Fairness Of Citigroup's $590 Million Settlement.
I don't know whether the same thing is going to happen in the Bank of America case, but I have been working on it, and I am under the impression that The Charlotte Observer (where Bank of America is headquartered) is working on an article about Friday's "fairness" hearing in Manhattan in that case.
In my view, there has been a history of a failure of adequate consideration in these class action lawsuits of a a general public interest in the deterrence of corporate wrongdoing and of a general investor interest that these lawsuits not pretend to make recovery when the actual gains from the alleged wrongdoing are in the pockets of selling shareholders and there is only a shuffling around of losses.
Maybe newspaper publicity will have an impact on these cases; maybe not.
I think all state attorneys general and all state securities regulators should be endeavoring to protect the citizens and investors in their respective states by speaking out in some fashion, such as by an amicus curiae submission to the Court.
Thank you.
Rob Shattuck

Retirement Systems of Alabama 11/08 reply to me

Teachers'
Paul R. Hubbert, Chair
Sarah Swindle, Vice Chair
Employees'
State State Police Public Judicial
Bob Riley, Chair
John H. Wilkerson, Jr., Vice Chair
THE RETIREMENT SYSTEMS OF ALABAMA
David G. Bronner, CEO
Marcus H. Reynolds, Jr., Deputy
November 20, 2008
Mr. Robert Shattuck
3812 Spring Valley Circle
Birmingham, Alabama 35223
RE: Middlesex County Retirement System Class Action
Dear Mr. Shattuck:
Your letter of November 14, 2008, to Dr. David Bronner regarding the
participation of governmental retirement systems in class action securities fraud cases has
been referred to me. I understand, and share to some degree, your concern but I think
that your analysis is missing something very important. Both corporate fraud and class
action lawsuit abuse have existed in this country for many years. In recent years
governmental retirement plans have become active in class action security fraud cases to
prevent the abuse of which you complain as well as to police the marketplace.
In 1995 Congress enacted the Private Securities Litigation Reform Act of 1995
(PSLRA) giving institutional investors priority in the selection of lead plaintiff in class
action security fraud cases. Prior to that the first plaintiff to the courthouse was named
lead plaintiff and that plaintiff might be an individual with no interest in the case other
than receiving kickbacks from a plaintiff's law firm for allowing it to use his name as
plaintiff. Congress believed that institutional investors would be more responsible lead
plaintiffs and events since the enactment of the Reform Act have proven that belief to be
true.
Even so, public pension plans do not rush to the courthouse to be lead plaintiffs.
Many, if not most, of the larger public pension plans in the United States follow a
procedure similar to that adopted by RSA several years ago. When a securities fraud case
is filed we check to see if we suffered losses due to the alleged misconduct and whether
the extent of our losses is such that we might be considered by the court to be a proper
lead plaintiff. We check to see if any other public pension plans will seek lead plaintiff
status and whether they will be represented by a responsible, competent law firm. If
there is a responsible lead plaintiff represented by a responsible law firm we consider that
we and the class will be well represented. If there is not another responsible lead plaintiff
represented by a responsible law firm, than we may feel it is our duty to represent the
class, if we qualify to do so and if it is a meritorious law suit. If we choose to seek lead

Page 2
plaintiff status and if we are selected as lead plaintiff, we control the litigation and, we
control settlement negotiations, not the lawyers.
As lead plaintiffs, public pension plans have selected more responsible law firms
to represent the class, have negotiated significantly lower attorney's fees, and have
exercised more control over the case, taking into consideration many factors, including
the need to reform corporate conduct to protect the integrity of the market place and the
continuing health of the defendant corporation. Public pension plans, as lead plaintiffs,
have sought remedies in addition to monetary damages, to compensate both former and
current stockholders of the company who have lost money due to corporate fraud, such as
management reform, while helping to prevent such future misconduct that would damage
the corporation and stock holders and have sought to eradicate fraudulent market
practices that affect the financial markets. Monetary damages are, of course, often paid
by the defendant's insurance company.
Public pension plans have also sought to hold liable the individuals responsible
for the fraud and other companies that aid and abet securities fraud. Recent court rulings
have made it more difficult to hold aiders and abettors accountable and indemnity
agreements make it difficult to recover against the individual corporate executive who
has defrauded both the company and its stockholders.
Even when a public pension plan is not the lead plaintiff in a securities fraud case
public pension plans have often appeared in court and objected to attorneys fees
requested in securities fraud cases and have been successful in reducing the fee actually
awarded by the court ..
It is not a perfect system but better, far better, than it was before public pension
plans began to take an active role in this type litigation. In accepting the role of lead
plaintiff in a class action lawsuit the public pension plans are simply being good citizens.
I hope and trust that this gives you a better understanding of the role of public
pension plans in security fraud litigation. If you have any further questions I would be
happy to discuss this issue with you.
Sincerely,
William T. Stephens
General Counsel
WTSlbhj

From: RDShatt
To: ersinfo@rsa-al.gov
Sent: 11/23/2008 7:54:26 A.M. Central Standard Time
Subj: For William Stephens re Middlesex County Retirement System Class Action
For William Stephens re Middlesex County Retirement System Class Action
Dear Mr. Stephens,
Thank you very, very much for your reply letter dated November 20, 2008. I would greatly like to discuss this topic further with you, but I am not sure how much time you are willing to spend.
Our entire society, including The Retirement Systems of Alabama, has a significant interest in reducing corporate fraud and misconduct, including such as occurred in the above class action.
I contend that the plaintiffs' lawyers undermine this societal objective. My argumentation about this is set out at this link Does the Law Undermine Business Ethics? .
If you would care to take the time to read my argumentation and comment on it, I would be very interested in what you have to say.
On the other hand, I will understand it that is asking too much.
Sincerely,
Robert Shattuck

Update of objection in Morgan Keegan

From: RDShatt@aol.com

To: jbernstein@labaton.com, rcs@cabaniss.com, pfruin@maynardcooper.com, blatham@bassberry.com, larry.polk@sutherland.com, kevinlogue@paulhastings.com
Sent: 3/16/2013 11:54:44 A.M. Central Daylight Time
Subj: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv
VIA US MAIL
Clerk of the Court
United States District Court for the Western District of Tennessee
Clifford Davis/Odell Horton Federal Building
167 North Main Street, Room 242
Memphis, Tennessee 38103
Re: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv
To the Honorable United States District Court for the Western District of Tennessee:
I object to the proposed settlement in “In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv.”
I previously mailed a preliminary objection to the Court, and I emailed the preliminary objection to the above email addresses of counsel. The preliminary objection is posted on the Internet at http://robertshattuck.blogspot.com/2013/03/objection-in-morgan-keegan-closed-end.html. A copy of the preliminary objection is enclosed herewith and made part hereof..
The preliminary objection did not set forth any requested purchase trade information. To correct that I state the following: My name, address and telephone number are Robert Shattuck, 3812 Spring Valley Circle, Birmingham, AL 35223, (205) 967-5586. My closed end fund shares were held in my IRA, and the name shown on the notice I received is MLPF&S CUST FPO ROBERT D SHATTUCK JR IRA. The said IRA is not currently at Merrill Lynch. I have not been able to find the requested purchase trade information in my retained paper files. I do not have online access to electronic records of the brokerage accounts where my IRA was held during the relevant periods of time. According, this objection does not specify any of the requested purchase trade information for my IRA Two members of my family also received notice of the class action but I am not involving them in this objection. I further received notice as ROBERT D SHATTUCK JR TTEE ERMA H SHATTUCK REVOCABLE TR FBO SELF & CHILDREN. I make this objection as that trustee. I doubt that I can accurately establish all the requested purchase trade information for that account. I have been able to locate records that show three purchases of 400, 600, and 1000 shares of RMH on November 15, 2006 and two purchases of 1000 shares each of RMA on November 17, 2006, and a purchase of 1000 shares of RMA on November 27, 2006.
A copy of this letter and of the preliminary objection are being deposited in the US mail today, addressed to the counsel as specified in the Notice. I am also sending this by email to the above email addresses of counsel.
At the present time, I do not expect to appear at the hearing, and I do not have anyone else who will appear on my behalf. If I am able to obtain one or more others to appear on my behalf (or make written submission on my behalf), I will notify the Court.
Respectfully submitted,
Robert Shattuck, individually and as trustee (original to the Court signed manually)
March 16, 2013

Alabama Attorney General Strange

From: RDShatt@aol.com
To: constitutentaffairs@ago.state.al.us
Sent: 4/29/2013 10:51:02 A.M. Central Daylight Time
Subj: The economy, plaintiffs' lawyers, and the Attorney General's office
Dear Mr. Loftin,
Besides the specific matter I contacted the AG's office about recently, I have been making advocacy that class action and other "public" litigation that is pursued by plaintiffs' lawyers should instead be taken on by state AG offices.
I had some particular communications in 2011 with the AG's office about this, which communications you may find here in my blog. I am resuming on the this, including by contacting my Alabama state Senator and state Representative, and further contacting law school deans, and I want to let General Strange know about that.
In Birmingham, we are currently being inundated by TV commercials trolling for a variety of medical injury claims to prosecute, and billboard advertising by plaintiffs' lawyers seems to have increased.
Lots of struggling continues in the economy.. That includes lawyers struggling, which could explain the increased advertising.
The question for our lawmakers and for government prosecutors and regulators (such as the Attorney General), and for all the non-lawyer citizens, is whether societal interests are being properly served by everything the plaintiffs' lawyers do. Proposals for medical malpractice reform seem to be on the table constantly, and the debilitated state of the economy and the problems of governmental debt and deficit may be heightening the attention currently. See this report: States Debating Innovative Approaches to Medical Malpractice Reform | HealthFlock.
I don't know exactly where General Strange stands on this. I hope he and Alabama lawmakers are on the side of societal interests and not on the side of plaintiffs' lawyers interests.
Thank you again.
Sincerely,
Rob Shattuck
[Also see emails here.]

From: RDShatt@aol.com
To: ConstitutentAffairs@ago.state.al.us
CC: jmcpherson@naag.org, asc@asc.alabama.gov, ri@nasaa.org
Sent: 3/13/2013 9:13:27 A.M. Central Daylight Time
Subj: Re: New online contact
Thank you very much for the reply, Clay.
On the issue of entity level liability versus individual officer and employee liability for deterring corporate wrongdoing, as my blog reveals, I have been in contact with the National Association of Attorneys General. Jim McPherson has indicated that NAAG needs to defer to each attorney general formulating that attorney general's view on the subject and NAAG is not in a position to try to investigate and evaluate the questions presented by the issue. If Attorney General Strange considers this a worthwhile issue to take a position on and to publicize the same, I would be very pleased to participate in whatever he would like regarding research and investigation about the matter and making advocacy about the same. Just let me know if Attorney General Strange acts on this in any way, and I will try to link up my own efforts.
Further, on the local front, I have received notice of the Regions Morgan Keegan closed end funds class action litigation, and I am in the process of submitting this objection to the district court in Tennessee. I will follow up with the Alabama Securities Commission on this.
Sincerely,
Rob Shattuck

In a message dated 3/6/2013 11:42:16 A.M. Central Standard Time, ConstitutentAffairs@ago.state.al.us writes:
Dear Mr. Shattuck:
Thank you for contacting the Office of the Alabama Attorney General. We always appreciate hearing feedback from constituents in our great state. As the Director of Constituent Affairs, I am responding to your email on behalf of Attorney General Luther Strange.
We appreciate your feedback on this issue and the resource you provided regarding deterring corporate wrongdoing. I have taken the liberty of sharing your email and the blog post with Mr. Joe Borg of the Alabama Securities Commission who has oversight over all securities issues in Alabama. Thank you again for contacting the Office of the Alabama Attorney General.
Sincerely,
Clay J. Loftin
Director of Constituent Affairs

___________________________
Clay J. Loftin
Office of the Alabama Attorney General
Director of Constituent Affairs
501 Washington Avenue
PO Box 300152
Montgomery, Alabama 36130
http://www.ago.alabama.gov/

-----Original Message-----
From: server@ago.alabama.gov [mailto:server@ago.alabama.gov]
Sent: Friday, March 01, 2013 8:14 AM
To: ConstituentAffairs
Subject: New online contact
submittedDate: 03/01/2013
Prefix:
FirstName: Rob
MiddleI:
LastName: Shattuck
Suffix:
Age:
Address1: 3812 Spring Valley Circle
Address2:
City: Mountain Brook
State: AL
Zip: 35223
HomePhone: 205-967-5586
WorkPhone:
EMail:
Division: 17
Description: Dear Mr. Strange,
I am writing this online message in follow up to an online message I sent to you last October.
As Attorney General, you might want to ponder this February 18th post "SEC and Citi: Justice for Sale" (URL http://robertshattuck.blogspot.com/2013/02/the-bloxham-voice.html) in Eleanor Bloxham's blog, The Bloxham Voice.
The post registers the public's growing complaint about the lack of individual accountability for corporate wrongdoing and suggests that the SEC regulators themselves may be part of the problem by reason of the revolving door between regulating agencies and the regulated companies, and regulators not being as aggressive as they should be in order to curry favor with corporate management from whom the regulators may seek future employment.
Ms. Bloxham's blog post suggests a case for state attorneys general to make that they are to be more trusted by the public for deterring corporate wrongdoing.
Thank you.
Sincerely,
Rob Shattuck
Mountain Brook
CLIENT_ADDRESS: 74.248.147.148
BROWSERTYPE: Mozilla/5.0 (compatible; MSIE 9.0; AOL 9.6; AOLBuild 4340.5002; Windows NT 6.0; Trident/5.0)

Letters to Court re Citigroup and BofA

From: RDShatt@aol.com
To: bkarp@paulweiss.com, plinden@kmllp.com
Sent: 3/11/2013 8:07:22 A.M. Central Daylight Time
Subj: In re Citigroup Securities Litigation Master File No. 07 MDL CIV 9901 (SHS)

BY US MAIL
United States District Court
Southern District of New York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007-1312
IN RE CITIGROUP SECURITIES Master File No. 07 MDL CIV 9901 (SHS)
LITIGATION
:::::
ECF CASE
To the Honorable United States District Court of the Southern District of New York
I am not a member of the plaintiff class.
The enclosure is denominated an amicus objection.
The enclosure bears two case designations, one designation being for the above captioned Citigroup case and the second designation being for IN RE BANK OF AMERICA CORP. SECURITIES, DERIVATIVE, AND EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA) LITIGATION Master File No. 09 MDL 2058 (PKC), which is also pending in the Southern District of New York.
The enclosure was previously sent by US mail on December 11, 2012 to the Court and also to counsel in the Citigroup Securities Litigation. Further, the below email (with an electronic link to the enclosure) was sent to counsel in both cases on December 13, 2012:

From: RDShatt@aol.com
To: bkarp@paulweiss.com, plinden@kmllp.com, gcastaldo@ktmc.com, mwb@blbglaw.com, rkaplan@kaplanfox.com
Sent: 12/13/2012 11:28:09 A.M. Central Standard Time
Subj: Amicus curiae objection in Citigroup and Bank of America cases
To: Plaintiffs' counsel, Citigroup Inc. counsel and Bank of America Corp. counsel
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE BANK OF AMERICA CORP. Master File No. 09 MDL 2058 (PKC)
SECURITIES, DERIVATIVE, AND
EMPLOYEE RETIREMENT INCOME
SECURITY ACT (ERISA) LITIGATION
IN RE CITIGROUP INC. Master File No. 07 MDL CIV 9901 (SHS)
SECURITIES LITIGATION
AMICUS CURIAE OBJECTION OF ROBERT SHATTUCK TO SETTLEMENT AND ATTORNEYS FEES
Please be advised that a paper copy of this amicus curiae objection was mailed on December 11, 2012 to the Clerk of the Court, plaintiffs' counsel and Citicorp counsel in the above Citigroup litigation and will be mailed in due course to the Clerk of the Court, plaintiff's' counsel and Bank of America counsel in the above Bank of America litigation.
Thank you.
Sincerely,
Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
(205) 967-5586

The enclosure was originally posted on the Internet in November 2012 at URL http://robertshattuck.blogspot.com/2012/11/bank-of-america-draft-objection.html. The posting underwent revision, but it has been in its present form (the form of the enclosure) since the aforesaid mailing to the Court on December 11, 2012.
This is in the nature of an amicus letter or amicus objection to the Court, which I would understand the Court has no obligation to read or consider.
If the Court should choose to consider the enclosure, I would like to make the following brief points in this transmittal letter:
First, does this class action lawsuit and its settlement have any deterrent value and is it counter productive to the deterrence of corporate wrongdoing?
I have done extensive solicitation of regulators, state attorneys general, prosecutors, corporate management, ethics and compliance professionals, defense lawyers, and tort reform organizations, among others, to try to obtain their views on the foregoing question and for such views to be submitted to the Court. To my knowledge, none of the persons or organizations I have solicited have submitted or are going to submit their views to the Court.
Second, I would like to raise a new issue that came to my mind since December 11th, and that concerns the adequacy of the disclosure in the Notice, relative to two points. Point one is that the Notice is not very explicit, and can be fairly called opaque, in describing how untold (and unknown) numbers of selling shareholders are walking away with windfall gains in an untold (and unknown) aggregate amount and are being allowed to keep the windfall gains, and the settlement in substance is largely an arbitrary shifting around of the corresponding losses experienced by purchasing shareholders. . Point two is, if I was a purchasing shareholder, and I had a loss, I would find it objectionable if the substance of the settlement was that my loss was being arbitrarily increased because my loss was less than the loss of other purchasing shareholders, and part of their greater loss is in substance getting arbitrarily shifted to me. As to this point two as well, the Notice is not very explicit and can be fairly be called opaque, in order for members of the plaintiff class ito decide to make an objection to the settlement or not.
Third, I make the suggestion to the Court that the Court request briefs from the plaintiffs and defendants addressing the issues raised in the enclosure and also the foregoing new issue.
Since this letter and the enclosure have no legal standing for recognition by the Court, and the Court has unfettered power to consider the same, or not, at this time, I am sending this letter and enclosure by US mail only to the Court and am sending this letter by email to counsel specified in the Notice (per the above email addresses), which email has the above Internet link to the posted form of the enclosure.
Respectfully submitted,
Robert Shattuck
Birmingham, AL

From: RDShatt@aol.com
To: mwb@blbglaw.com, steven@blbglaw.com, rkaplan@kaplanfox.com, ffox@kaplanfox.com, dkessler@ktmc.com, gcastaldo@ktmc.com, bkarp@paulweiss.com, dkramer@paulweiss.com, asoloway@paulweiss.com
Sent: 3/11/2013 8:08:23 A.M. Central Daylight Time
Subj: Bank of America Corp., SDNY Master File No. 09 MDL 2058 (PKC)

BY US MAIL
United States District Court 

Southern District of New York
Daniel Patrick Moynihan United States Courthouse
500 Pearl Street
New York, NY 10007-1312
IN RE BANK OF AMERICA CORP. Master File No. 09 MDL 2058 (PKC)
SECURITIES, DERIVATIVE, AND
EMPLOYEE RETIREMENT INCOME
SECURITY ACT (ERISA) LITIGATION
:::::
ECF CASE
To the Honorable United States District Court of the Southern District of New York
I am not a member of the plaintiff class.
The enclosure is denominated an amicus objection.
The enclosure bears two case designations, one designation being for the above captioned Bank of America case and the second designation being for In re Citigroup Securities Litigation Master File No. 07 MDL CIV 9901 (SHS), which is also pending in the Southern District of New York.
The enclosure was previously sent by US mail on December 11, 2012 to the Court and also to counsel in the Citigroup Securities Litigation. Further, the below email (with an electronic link to the enclosure) was sent to counsel in both cases on December 13, 2012:

From: RDShatt@aol.com
To: bkarp@paulweiss.com, plinden@kmllp.com, gcastaldo@ktmc.com, mwb@blbglaw.com, rkaplan@kaplanfox.com
Sent: 12/13/2012 11:28:09 A.M. Central Standard Time
Subj: Amicus curiae objection in Citigroup and Bank of America cases
To: Plaintiffs' counsel, Citigroup Inc. counsel and Bank of America Corp. counsel
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
IN RE BANK OF AMERICA CORP. Master File No. 09 MDL 2058 (PKC)
SECURITIES, DERIVATIVE, AND
EMPLOYEE RETIREMENT INCOME
SECURITY ACT (ERISA) LITIGATION
IN RE CITIGROUP INC. Master File No. 07 MDL CIV 9901 (SHS)
SECURITIES LITIGATION
AMICUS CURIAE OBJECTION OF ROBERT SHATTUCK TO SETTLEMENT AND ATTORNEYS FEES
Please be advised that a paper copy of this amicus curiae objection was mailed on December 11, 2012 to the Clerk of the Court, plaintiffs' counsel and Citicorp counsel in the above Citigroup litigation and will be mailed in due course to the Clerk of the Court, plaintiff's' counsel and Bank of America counsel in the above Bank of America litigation.
Thank you.
Sincerely,
Robert Shattuck
3812 Spring Valley Circle
Birmingham, AL 35223
(205) 967-5586 ..

The enclosure was originally posted on the Internet in November 2012 at URL http://robertshattuck.blogspot.com/2012/11/bank-of-america-draft-objection.html. The posting underwent revision, but it has been in its present form (the form of the enclosure) since the aforesaid mailing to the Court on December 11, 2012.
This is in the nature of an amicus letter or amicus objection to the Court, which I would understand the Court has no obligation to read or consider.
If the Court should choose to consider the enclosure, I would like to make the following brief points in this transmittal letter:
First, does this class action lawsuit and its settlement have any deterrent value and is it counter productive to the deterrence of corporate wrongdoing?
I have done extensive solicitation of regulators, state attorneys general, prosecutors, corporate management, ethics and compliance professionals, defense lawyers, and tort reform organizations, among others, to try to obtain their views on the foregoing question and for such views to be submitted to the Court. To my knowledge, none of the persons or organizations I have solicited have submitted or are going to submit their views to the Court.
Second, I would like to raise a new issue that came to my mind since December 11th, and that concerns the adequacy of the disclosure in the Notice, relative to two points. Point one is that the Notice is not very explicit, and can be fairly called opaque, in describing how untold (and unknown) numbers of selling shareholders are walking away with windfall gains in an untold (and unknown) aggregate amount and are being allowed to keep the windfall gains, and the settlement in substance is largely an arbitrary shifting around of the corresponding losses experienced by purchasing shareholders. . Point two is, if I was a purchasing shareholder, and I had a loss, I would find it objectionable if the substance of the settlement was that my loss was being arbitrarily increased because my loss was less than the loss of other purchasing shareholders, and part of their greater loss is in substance getting arbitrarily shifted to me. As to this point two as well, the Notice is not very explicit and can be fairly be called opaque, in order for members of the plaintiff class ito decide to make an objection to the settlement or not.
Third, I make the suggestion to the Court that the Court request briefs from the plaintiffs and defendants addressing the issues raised in the enclosure and also the foregoing new issue.
Since this letter and the enclosure have no legal standing for recognition by the Court, and the Court has unfettered power to consider the same, or not, at this time, I am sending this letter and enclsoure by US mail only to the Court and am sending this letter by email to counsel specified in the Notice (per the above email addresses), which email has the above Internet link to the posted form of the enclosure
Respectfully submitted,
Robert Shattuck

Birmingham, AL

Letter to BofA, Citigroup and Regions ethics & compliance

From: RDShatt@aol.com
To: ethicsconcern@citi.com, hugh.nickson@regions.com
Sent: 3/7/2013 9:57:29 A.M. Central Standard Time
Subj: Bank wrongdoing; disabled ethics and compliance officers
Ms. Maria C. Hermida (via email ethicsconcern@citi.com)
Chief Ethics Officer
Citigroup
Citi Ethics Office
1 Court Square, 24th floor
Long Island City, N.Y. 11101

Ms. Andrea Smith (via US mail)
Global Human Resources Executive
Bank of America
100 North Tryon Street
Charlotte, NC 28202
Mr. Hugh Nickson (via email hugh.nickson@regions.com)
Ethics Program Manager
Regions Bank
1901 6th Avenue North
Birmingham AL 35203
Dear Ms. Hermida, Ms. Smith, and Mr. Nickson:
I am contacting you in your capacities as ethics and compliance contacts at your respective banks. The reason for contacting you is because your respective banks are currently involved in bank wrongdoing cases which are representative of a significant domain of corporate wrongdoing in which (i) seriously defective legal principles are invoked, (ii) there is undermining of your corporate ethics and compliance missions, (iii) ethics and compliance officers do not seem to have input in the domain, and (iv) there is otherwise inadequate representation of the societal interest in deterring corporate wrongdoing. (I have previously tried to contact Ms. Hermida but I don't know whether she saw my prior communication.)
As background, please be advised that I have been in communication with the Ethics & Compliance Officer Association, the Ethics Resource Center, and the Society of Corporate Compliance and Ethics, among others in the ethics and compliance field. You may see some of my communications here (SCCE), here (ERC) and here (ECOA).
The particular cases involving your respective banks are the pending securities class action lawsuits regarding Citigroup's CDO involvement, Bank of America's acquisition of Merrill Lynch, and the Region Bank's Morgan Keegan closed end funds litigation. I am filing objections in these class action cases, which allegations lay out the contentions I make in the first paragraph above. You may find my objections in the Citigroup and Bank of America cases here and my objection in the Morgan Keegan litigation here.
If you would like to engage in discussion with me about my contentions, I hope you will contact me.
Thank you.
Sincerely,
Rob Shattuck
Birmingham, AL

Objection in Morgan Keegan Closed End Fund litigation

From: RDShatt@aol.com
To: jbernstein@labaton.com, rcs@cabaniss.com, pfruin@maynardcooper.com, blatham@bassberry.com, larry.polk@sutherland.com, kevinlogue@paulhastings.com
Sent: 3/5/2013 12:11:29 P.M. Central Standard Time
Subj: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv

VIA US MAIL
Clerk of the Court
United States District Court for the Western District of Tennessee
Clifford Davis/Odell Horton Federal Building
167 North Main Street, Room 242
Memphis, Tennessee 38103
Re: In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv

To the Honorable United States District Court for the Western District of Tennessee:

Procedural
I object to the proposed settlement in “In re Regions Morgan Keegan Closed-End Fund Litigation, No. 07-cv-02830 SHM dkv.”
This objection is preliminary for the reasons that (i) I am endeavoring to obtain assistance from counsel who is more technically proficient than myself, (ii) part of my contentions are advocacy on behalf of a societal interest of deterring corporate wrongdoing, which is contrary to my interest as a member of the plaintiff class, as to which I wish to reserve on the best way to make my contentions, (iii) I am soliciting the defendants to consider my objection and whether they may also advance my contentions in some fashion at this juncture, and (iv) I am making solicitations of non-parties whom I believe have a special interest in the litigation for them to submit their views to the Court on an amicus basis.
By reason of my objection being preliminary at this time, I am sending this objection at this time by U.S. mail to the Court and I am sending it electronically to other persons specified in the Notice.
My name, address and telephone number are Robert Shattuck, 3812 Spring Valley Circle, Birmingham, AL 35223, (205) 967-5586. My closed end fund shares were held in my IRA, and the name shown on the notice I received is MLPF&S CUST FPO ROBERT D SHATTUCK JR IRA. My trading files are voluminous, and I am in the process of obtaining the required purchase trade information.

Background
I have previously objected in class action lawsuits of which I received notice as being in the plaintiff class. I have attempted to register numerous other complaints about class action lawsuits. These objections and other complaints of mine are digested in my blog How To Combat Plaintiffs' Lawyers (URL http://robertshattuck.blogspot.com/).
Many other persons have substantial complaints about class action lawsuits and their settlement, and there are several websites that provide much information in support of those who find much class action litigation objectionable . Among the more noteworthy of these websites are http://overlawyered.com/ and the Center for Class Action Fairness (URL http://centerforclassactionfairness.blogspot.com/ ). Mr. Ted Frank at the Center for Class Action Fairness is very active in filing objections to class action lawsuits, and he has his particular standards, criteria, and legal positions and arguments for trying to make successful objections.
I have my own argumentation that I have been developing in making objections. I don't have Mr. Frank's technical proficiency to know whether I am presenting my arguments in a way that a Court may take them into account in deciding to approve or not approve a settlement and attorney fees.

General statement of objection
There are two large class action lawsuits pending in the Southern District of New York involving "artificially inflated" stock prices created by misrepresentations and non-disclosures, which are similar to this case. I am not a member of the plaintiff class in either of those lawsuits, which are against Citigroup and Bank of America, but I am in the process of filing amicus objections, which can be found on the Internet at URL http://robertshattuck.blogspot.com/2012/11/bank-of-america-draft-objection.html. In those objections, I make a general statement of objection as follows:

This (and other large class action litigation) has a significant adverse effect on the protection of the public from corporate wrongdoing, because of an undue focus of such litigation on entity liability to try to deter corporate wrongdoing. This focus undermines business ethics and diverts corporate and societal resources away from a more effective deterrent of holding individually liable the officers and employees who design and carry out the corporate wrongdoing.
This adverse effect flowing from the undue focus on entity liability is augmented by insufficient attention being paid to the fact that the litigation mainly seeks transfers of amounts by and among persons in interest who are not culpable of any wrongdoing and is, at bottom, a case of unjust enrichment. Instead of being treated as the unjust enrichment case it is, the litigation is allowed to play up the wrongdoing carried out by the culpable officers and employees, and it improperly makes the same relevant to the how the unjust enrichment involving innocent persons gets resolved. If more attention was paid to the case being about unjust enrichment as between innocent persons, there would be less willingness of the Court to allow entity liability to undermine the protection of the public from corporate wrongdoing.
Further, the innocent persons in this case who have benefited from the alleged wrongdoing are largely not parties to the litigation, they will not be required to pay over their unjust enrichment to other innocent persons who have suffered harm from the wrongdoing, and the transfers among innocent parties in interest who have losses are an arbitrary shifting around of losses of those parties, decreasing the losses of some and increasing the losses of others.
The dysfunctionality of this class action securities litigation is brought into relief by the fact that they are two cases among many similar cases. An innocent shareholder who may have his losses reduced by the settlement in one of these case can, in another case, have his losses increased. All the aggregate losses in all the cases are augmented by the attorneys fees and other costs of litigation. Thus, from the point of view of the investing public, not only are these cases counterproductive in deterring corporate wrongdoing, they harm the financial market place by their arbitrary shifting around of losses that variously lessen or increase the losses of investors from case to case, and that augment the aggregate of the losses by the attorneys fees and costs of litigation.
In exercising its discretion to approve the settlement and attorney fees, the Court should determine whether the interest of the public in preventing corporate wrongdoing is being served or undermined and whether the case is only about unjust enrichment as among innocent persons in interest. and how well or how poorly the settlement does justice in that regard, particularly taking into account that the innocent persons who were unjustly enriched by the wrongdoing are not parties to the litigation and will not be required to disgorge their unjust enrichment, and there is only shifting of losses around among the parties in interest who had losses and the increasing of those aggregate losses.
Attorney fees that the Court approves should presumably have a connection with the value associated with the bringing of the litigation and its disposition. If little or no justice is being done in the case as an unjust enrichment case, if it adds burdens to investors by augmenting losses that are experienced, and if there is no deterrence value to the litigation and it is wasteful of resources and counterproductive to achieving deterrence, the Court should adjust its approval of the settlement and attorney fees accordingly. The higher the attorneys fees that are approved that do not provide value, the more there will be encouragement to the bringing of litigation that is on balance detrimental to the public interest and to the goal of doing justice.
I consider the foregoing general statement of objection applicable to this case, subject to a difference in the cases that is discussed below.

There are two points I would like to emphasize.
First, I wish the Court to consider the extent to which shareholders of the Closed End Funds who sold during the period of the artificially inflated price were basically lucky and walked away with windfall gains (or windfall avoidance of losses) by reason of the misrepresentation and non-disclosure wrongdoing (i.e., if there had not been the misrepresentation and non-disclosure, the price at which the shares could have been sold would have been lower and the selling shareholders in question would not have had a windfall gain or windfall avoidance of loss). These selling stockholders were not culpable of any wrongdoing in making their sales at the artificially inflated prices. Their windfall gains (or windfall avoidance of losses) were at the corresponding expense of other persons who bought the shares in question at the artificially inflated prices and who were basically unlucky. In considering the foregoing, the Court should ask itself how well the law is working in this situation in which one set of lucky, non-culpable persons (selling stockholders) walk away with and keep such windfall gains and the law is not providing a way for recovery from them of those windfall gains by the second set of unlucky, non-culpable parties (the persons purchasing the shares at artificially inflated prices) who experienced losses corresponding to the wondfall gains obtained by the first set of persons.
If the Court asks the foregoing question, the Court should next proceed to consider, if the windfall gains are not being recovered from the lucky persons who had the windfall gains, then who is being called on to compensate the purchasers for the losses they experienced that correspond to the windfall gains that others walk away with..

Citigroup and Bank of America
In the Citigroup and Bank of America cases, in which selling shareholders will walk away with their windfall gains, the substance is that, if the settlements are approved, there will be a shifting around of losses among the purchasers experiencing losses and also a shifting of losses to other stockholders who had neither windfall gain nor a loss (e.g., stockholders who purchased their shares before the start of the aritficially inflated period and held their shares throughout the entirety of the artificially inflated period).
I have not been able to tell that any of the Court or the parties in the Citigroup and Bank of America lawsuits have endeavored to focus on how the law is operating to allow selling shareholders to walk away with their windfall gains and to shift around arbitrarily the corresponding losses among those who experienced the losses and also aribtrarily shifting losses to other shareholders who experienced neither windfall gain nor experienced losses. My amicus objections attempt to call these circumstances to the attention of the Court and attempts to urge that the Court reflect on the matter and decide whether the same should affect how the Court exercises its discretion in approving the settlements and attorney fees, or not.
Given the arbitrary shifting around of losses that has the effect of increasing the losses of some purchasers and decreasing the losses of other purchasers, there seems to be disparate interests in the outcome of the litigation, even within the plaintiff class, and I don't see how those interests are being adequately receiving representation in the settlement. Corporate management of the defendant banks don't have a personal interest in registering complaint about how the law is operating, as just described, and seems inclined to wash its hands of the matter.
If I was a purchasing shareholder in Citigroup or Bank of America, and I had a loss, I would find it objectionable if the amount of my loss was being arbitrarily increased because my loss was less than that of other purchasing shareholders, and part of their greater loss was getting aribitrarily getting shifted to me and increasing my loss.
The Notices in the Citigroup and Bank of America cases are not very explicit, and can be fairly be called opaque, in describing how selling shareholders are walking away with windfall gains and being allowed to keep the gains and the settlement is largely shifting around the corresponding losses experienced by purchasing shareholders. The authors of those Notices, and the Courts that approved the Notices, presumably think the same is not important to members of the plaintiff class in making decisions about the proposed settlement in those cases. As just stated, I disagree.
 
The difference in this case
The seeming indifference of the Court and of the parties in Citigroup and Bank of America cases (and of corprate mangement) regarding how the law is operating in those cases as described above comes into relief in the instant case.
In the instant case the Notice does not say which defendants (including the Closed End Funds) are or are not contributing to the settlement fund and how much the respective defendants are contributing. As a member of the plaintiff class, for the reasons indicated above, I believe this is relevant in making a decision about the settlement proposal. By contrast again, the authors of the Notice and this Court which approved the Notice presumably do not think the same is relevant to the plaintiff class.
I searched on the settlement website and found that paragraph 6 of the Stipulation of Settlement provides that RFK and the Morgan Keegan Defendants will pay the required amount into the settlement fund, which I interpret to mean that none of the Closed End Funds will make a contribution to the settlement fund. Also, it appears that no Director Defendants or Officer Defendants will contribute to the settlement fund.
Thus, there is a difference in this case. This case is the same in that sellling shareholders in the Closed End Funds during the artificially inflated period are walking away with windfall gains, and recovery is not being obtained from them for the corrpesonding losses experienced by purchasers of the Closed End Funds' shares. In the instant case, however, there is a difference that there will not be shifting around of those losses among purchasers who experienced losses and a shifting of some losses to other innocent shareholders of the Closed End Funds who experienced neither gain nor loss. In liew of that, in this case the recovery will be from another set of persons not culpable of any of the alleged wrongdoing, to wit, shareholders of RFC and the Morgan Keegan corporate entities.
The shareholders of RFC and the Morgan Keegan corporate entities were not culpable of the wrongdoing and did not have windfall gains or avoid the losses caused by the wrongful misrepresentations and non-disclosures and did not profit from the same, and yet losses are being shifted onto them in the proposed settlement.
This Court should consider how well it thinks the law is working in this case, and, if the Court thinks the law is working poorly, the Court needs to decide how that should affect the exercise of its discretion in approving the settlement and approving attoneys fees, or not.

No deterrent effect
This brings me to the second branch of my objection.
To wit, it is my contention that this class action litigation and settlement have no deterrent effect and are counterproductive to deterring corporate wrongdoing. This contention is laid out at length in my Citigroup and Bank of America objections, which can be found on the Internet, as indicated above, at URL http://robertshattuck.blogspot.com/2012/11/bank-of-america-draft-objection.html. I am not going to copy and paste that argumentation into this objection at this time.
There is a societal interest in effective deterrence of corporate wrongdoing, and advocacy for that societal interest is arguably against the interest of the plaintiff class (including myself as a member of the plaintiff class), to wit, if this litigation and settlement (and other class action litigation and settlements) undermine the deterrence of corporate wrongdoing, it can be argued that the Court should exercise its discretion not to approve the settlement and the attorneys fees, and that might adversely affect recovery by the plaintiff class.
I argue on behalf of the societal interest in effective deterrence of corporate wrongdoing.in Citigroup and Bank of America cases. Other persons and organizations have a special interest in deterring corporate wrongdoing. These include corporate eithcs and compliance professionals, state attorneys general, prosecuting attorneys, regulators (including the SEC and state securities regulators), and corporate management. I have made extensive communications to such persons and organizations to invite them to submit their views about effective deterrence of corporate wrongdoing to the Courts in the Citigroup and Bank of America cases. These communications and responses I have received are compiled in an Appenix A to my objection in those cases, which Appendix A may be found on the Internet at URL http://robertshattuck.blogspot.com/2012/11/bofa-objection-appendix-a.html.
As indicated above, the plaintiff class probably cannot be looked to make argumentation on behalf of the societal interest of deterring corporate wrongdoing. Whether the defendants can or should make argumentation on behalf of such societal interest is something the defendants need to determine. I am making advocacy on behalf of the societal interest, whether on an amicus basis or otherwise. The persons and organizations referred to in the preceding paragraph will make decisions for themselves whether they wish to submit views to a Court.
Ultimately, it it up to the Court to decide, in the exercise of its discretions, whether it will take account of the societal interest of deterring corporate wrongdoing.

Suggestion to the Court
If the Court considers this objection to have possible merits worthy of its consideration, I suggest that the Court request the plaintiffs and the defendants to submit briefs on the issues presented.

Respectfully submitted,
Robert Shattuck (original mailed to the Clerk manually signed)

Federal regulators and revolving door

From: RDShatt@aol.com
To: roy.snell@corporatecompliance.org, paul.mcnulty@bakermckenzie.com, jemurphy@voicenet.com, patrick.gnazzo@gmail.com, corporate.ethics@lmco.com, mdoyle@aegis-compliance.com
CC: ebloxham@thevaluealliance.com
Sent: 2/27/2013 5:57:09 P.M. Central Standard Time
Subj: Food for thought: The Bloxham Voice
To Government Compliance Conference speakers:
In follow up to my recent emails to you, I call to your attention the February 18th post SEC and Citi: Justice for Sale in Eleanor Bloxham's blog, The Bloxham Voice.
The post registers the public's growing complaint about the lack of individual accountability for corporate wrongdoing and suggests that the regulators themselves may be part of the problem by reason of the revolving door between regulating agencies and the regulated companies, and regulators not being as aggressive as they should be in order to curry favor with corporate management the regulators may seek future employment from.
I hope Ms. Bloxham's blog post provides further impetus for the speakers to think about what I said in my emails.
Thank you.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: jmcpherson@naag.org
Sent: 3/1/2013 7:28:29 A.M. Central Standard Time
Subj: Federal regulators and revolving door
Dear Jim,
NAAG might want to ponder this February 18th post SEC and Citi: Justice for Sale in Eleanor Bloxham's blog, The Bloxham Voice.
The post registers the public's growing complaint about the lack of individual accountability for corporate wrongdoing and suggests that the SEC regulators themselves may be part of the problem by reason of the revolving door between regulating agencies and the regulated companies, and regulators not being as aggressive as they should be in order to curry favor with corporate management from whom the regulators may seek future employment.
Ms. Bloxham's blog post suggests a case for state attorneys general to make that they are to be more trusted by the public for deterring corporate wrongdoing.
Thanks.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: ri@nasaa.org
Sent: 3/1/2013 7:39:53 A.M. Central Standard Time
Subj: SEC and revolving door
Dear Mr. Iuculana,
I am writing this in follow up to a couple of emails I sent previously.
NASAA might want to ponder this February 18th post SEC and Citi: Justice for Sale in Eleanor Bloxham's blog, The Bloxham Voice.
The post registers the public's growing complaint about the lack of individual accountability for corporate wrongdoing and suggests that the SEC regulators themselves may be part of the problem by reason of the revolving door between regulating agencies and the regulated companies, and regulators not being as aggressive as they should be in order to curry favor with corporate management from whom the regulators may seek future employment.
Ms. Bloxham's blog post suggests a case for state securities regulators to make that they are to be more trusted by the public for deterring corporate wrongdoing.
Thanks.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: chris.rhodes@asc.alabama.gov
CC: asc@asc.alabama.gov
Sent: 3/1/2013 7:46:16 A.M. Central Standard Time
Subj: SEC and revolving door
Dear Mr. Rhodes,
I am writing this in follow up to a couple of emails I sent previously addressed to the Commission and you.
The Commission might want to ponder this February 18th post SEC and Citi: Justice for Sale in Eleanor Bloxham's blog, The Bloxham Voice.
The post registers the public's growing complaint about the lack of individual accountability for corporate wrongdoing and suggests that the SEC regulators themselves may be part of the problem by reason of the revolving door between regulating agencies and the regulated companies, and regulators not being as aggressive as they should be in order to curry favor with corporate management from whom the regulators may seek future employment.
Ms. Bloxham's blog post suggests a case for state securities regulators to make that they are to be more trusted by the public for deterring corporate wrongdoing.
Thanks.
Sincerely,
Rob Shattuck
Birmingham

[online message submitted to Alabama AG]
Dear Mr. Strange,
I am writing this online message in follow up to an online message I sent to you last October.
As Attorney General, you might want to ponder this February 18th post "SEC and Citi: Justice for Sale" (URL http://robertshattuck.blogspot.com/2013/02/the-bloxham-voice.html) in Eleanor Bloxham's blog, The Bloxham Voice.
The post registers the public's growing complaint about the lack of individual accountability for corporate wrongdoing and suggests that the SEC regulators themselves may be part of the problem by reason of the revolving door between regulating agencies and the regulated companies, and regulators not being as aggressive as they should be in order to curry favor with corporate management from whom the regulators may seek future employment.
Ms. Bloxham's blog post suggests a case for state attorneys general to make that they are to be more trusted by the public for deterring corporate wrongdoing.
Thank you.
Sincerely,
Rob Shattuck
Mountain Brook

Is FSGO discipline a nullity?

From: RDShatt@aol.com
To: hpgoldfield@hoganlovells.com
Sent: 2/26/2013 12:41:29 P.M. Central Standard Time
Subj: Is discipline under FSGO Sec. 8B2.1(b)(6) a nullity?
Dear Mr. Goldfield,
I am contacting you in your capacity as a Board member of the Ethics Resource Center.
I am trying to establish whether or not there is any substance to "disciplinary measures" under FSGO Sec. 8B2.1(b)(6).
Thus far. I have not been able to elicit any contention by any ethics/compliance organization or professional that there is any meaningful implementation of practices and procedures for, and actual use of, "disciplinary measures" under Sec. 8B2.1(b)(6); and, based on inquiries I have made and the non-responses thereto, I have tentatively concluded that discipline under Sec. 8B2.1(b)(6) is, practically speaking, a nullity.
For an indication of the inquiries I have made, see these Comments for FSGO panel, these Emails to FSGO panel members, and the emails here related to the upcoming SCCE Government Compliance Conference.
I am sorry I cannot get much of a response from anyone on this, and I am possibly relegated to inferring, if no interested E&C organization or professional is willing to speak on this, that discipline under Sec. 8B2.1(b)(6) is, for all intents and purposes, a nullity.
I trust you can appreciate my effort to get information.
Thank you.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: Henry.Hart@shrm.org
Sent: 2/26/2013 12:44:46 P.M. Central Standard Time
Subj: Is discipline under FSGO Sec. 8B2.1(b)(6) a nullity?
Dear Mr. Hart,
I am contacting you in your capacity as a Board member of the Ethics Resource Center.
I am trying to establish whether or not there is any substance to "disciplinary measures" under FSGO Sec. 8B2.1(b)(6).
Thus far. I have not been able to elicit any contention by any ethics/compliance organization or professional that there is any meaningful implementation of practices and procedures for, and actual use of, "disciplinary measures" under Sec. 8B2.1(b)(6); and, based on inquiries I have made and the non-responses thereto, I have tentatively concluded that discipline under Sec. 8B2.1(b)(6) is, practically speaking, a nullity.
For an indication of the inquiries I have made, see these Comments for FSGO panel, these Emails to FSGO panel members, and the emails here related to the upcoming SCCE Government Compliance Conference.
I am sorry I cannot get much of a response from anyone on this, and I am possibly relegated to inferring, if no interested E&C organization or professional is willing to speak on this, that discipline under Sec. 8B2.1(b)(6) is, for all intents and purposes, a nullity.
I trust you can appreciate my effort to get information.
Thank you.
Sincerely,
Rob Shattuck

From: RDShatt@aol.com
To: glhinchman@f-a-f.org
Sent: 2/27/2013 8:12:51 A.M. Central Standard Time
Subj: Is discipline under FSGO Sec. 8B2.1(b)(6) a nullity?
Dear Ms. Hinchman,
I am contacting you in your capacity as a Board member of the Ethics Resource Center.
I am trying to establish whether or not there is any substance to "disciplinary measures" under FSGO Sec. 8B2.1(b)(6).
Thus far. I have not been able to elicit any contention by any ethics/compliance organization or professional that there is any meaningful implementation of practices and procedures for, and actual use of, "disciplinary measures" under Sec. 8B2.1(b)(6); and, based on inquiries I have made and the non-responses thereto, I have tentatively concluded that discipline under Sec. 8B2.1(b)(6) is, practically speaking, a nullity.
For an indication of the inquiries I have made, see these Comments for FSGO panel, these Emails to FSGO panel members, and the emails here related to the upcoming SCCE Government Compliance Conference.
I am sorry I cannot get much of a response from anyone on this, and I am possibly relegated to inferring, if no interested E&C organization or professional is willing to speak on this, that discipline under Sec. 8B2.1(b)(6) is, for all intents and purposes, a nullity.
I trust you can appreciate my effort to get information.
Thank you.
Sincerely,
Rob Shattuck