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The Blackstone Group may have misrepresented its financial condition to investors during its IPO.
Investigation Source (Case #08-cv-03601)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Investments
- Registration Statement
- Mortgage-Backed Securities
Product or Service
- Common Stock
Injury Type
- Monetary Loss
Investigation Details
This is a securities class action lawsuit against The Blackstone Group and certain officers and directors on behalf of all purchasers of common stock traceable to Blackstone's initial public offering on or about June 25, 2007.
Blackstone, through its subsidiaries, provides alternative asset management and financial advisory services worldwide.
The class action lawsuit alleges that on June 21, 2007, Blackstone filed with the SEC a Form S-1/A Registration Statement (the "Registration Statement"), for the IPO. On or about June 25, 2007, the Prospectus (the "Prospectus") with respect to the IPO, which forms part of the Registration Statement, became effective and more than 133 million shares of Blackstone's common stock were sold to the public at $31 per share, thereby raising more than $4 billion.
The class action complaint alleges that the Registration Statement failed to disclose that certain of Blackstone's portfolio companies were not performing well and were of declining value and, as a result, Blackstone's equity investment was impaired and Blackstone would not generate anticipated performance fees on those investments or would have fees "clawed-back" by limited partners in its funds.
On March 10, 2008, Blackstone issued a press release announcing its financial results for the full year of 2007 and the fourth quarter of 2007, the periods ending December 31, 2007. Among other disclosures, Blackstone announced that it was writing down its investment in Financial Guaranty Insurance Company by $122 million.
As of April 15, 2008, Blackstone common stock traded in a range of $17-$17.50 per share, approximately 45% below the IPO price of $31.00 per share.
Blackstone, through its subsidiaries, provides alternative asset management and financial advisory services worldwide.
The class action lawsuit alleges that on June 21, 2007, Blackstone filed with the SEC a Form S-1/A Registration Statement (the "Registration Statement"), for the IPO. On or about June 25, 2007, the Prospectus (the "Prospectus") with respect to the IPO, which forms part of the Registration Statement, became effective and more than 133 million shares of Blackstone's common stock were sold to the public at $31 per share, thereby raising more than $4 billion.
The class action complaint alleges that the Registration Statement failed to disclose that certain of Blackstone's portfolio companies were not performing well and were of declining value and, as a result, Blackstone's equity investment was impaired and Blackstone would not generate anticipated performance fees on those investments or would have fees "clawed-back" by limited partners in its funds.
On March 10, 2008, Blackstone issued a press release announcing its financial results for the full year of 2007 and the fourth quarter of 2007, the periods ending December 31, 2007. Among other disclosures, Blackstone announced that it was writing down its investment in Financial Guaranty Insurance Company by $122 million.
As of April 15, 2008, Blackstone common stock traded in a range of $17-$17.50 per share, approximately 45% below the IPO price of $31.00 per share.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Blackstone Group L.P., The (BX) | The Blackstone Group L.P., together with its subsidiaries, provides alternative asset management and financial advisory services worldwide. |