national city securities fraud case

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IN THE COURT OFCOMMONPLEAS

CUYAHOGA COUNTY, OHIO

LISA PARKER,500 SUNRISEDRIVE

FORT PIERCE, FL 34945

STEPHEN ENNS,

2301 WIDINS CREEK LANE

FORT PIERCE, FL 34981

F IL

2 0 9 9 A P R ? I P 1 : 0 t

Case No .

SHIRLEY STR C^Aplaint

CV 08 657360

CLASS ACTION

ON BEHALF OF THEMSELVES AND ALL

OTHERS SIMILARLY SITUATED,

P l a i n t i f f s , COMPLAINT FORVIOLATION OF

THE SECURITIES ACT OF 1933

v s .

NATIONAL CITY CORPORATION,

1900 E . NINTH STREET

CLEVELAND, OHIO 44114

DAVID A. DABERKO,


CLEVELAND, OHIO 441 14

JEFFREY D. KELLY,


CLEVELAND, OHIO 441 14

DEMAND FORJURY TRIAL

DEPOSITED

A P R 2 1 2 0 0 8

SECURE COSTS

GERALD E . FUERST C l e r k o f C o u r t s

PER /l x!%^ DEDUTY

THOMAS A. RICHLOVSKY,



JON E . BARFIELD,

1900 E . NINTH STREETCLEVELAND, OHIO 44114

JAMES S . BROADHURST,



51153876- . 5 7 3 6 0



CHRISTOPHER M. CONNOR, )

1900 E . NINTH STREET )

CLEVELAND, OHIO 44114 )

BERNADINE P . HEALY, )

1900 E . NINTH STREET )CLEVELAND, OHIO 441 14 )

)

S . CRAIG LINDNER, )


CLEVELAND, OHIO 441 14 )

PAULA. ORMOND, )


CLEVELAND, OHIO44114 )

GERALD L . SHAHEEN, )1900 E . NINTH STREET )


JERRY SUETHORNTON, )



MORRY WEISS, )



DAVID L . ZOELLER, )



ERNST &YOUNG, LLP, )

925 EUCLID AVENUE, SUITE 1300 )


D e f e n d a n t s . )



INTRODUCTION

1 . This i s a s e c u r i t i e s c l a s s a c t i o n brought on behalf of a l l c u r r e n t a nd f or me r N a t i o n a l

C i t y Corporation ( " N a t i o n a l C i t y " o r t h e "Company") employees who a c q u i r e d N a t i o n a l C i t y

common s t o c k p u r s u a n t a n d / o r t r a c e a b l e t o a r e g i s t r a t i o n s t a t e m e n t f i l e d with t h e S e c u r i t i e s and

Exchange Co mmiss io n ("SEC") on D e c e m b e r 1 , 2006 ( t h e " R e g i s t r a t i o n S t a t e m e n t " ) . Th e

D e c e m b e r 1 , 2 006 R e g i s t r a t i o n S t a t e m e n t w as f i l e d with t h e SEC s o t h a t N a t i o n a l C i t y c o u l d o f f e r

2 . 4 m i l l i o n s h a r e s of s t o c k t o e m plo ye es o f Harbor F e d e r a l Savings Bank ("Harbor Bank") under

t h e Harbor Bank Employee S t o c k Ownership Plan and t h e Harbor Bank Stock I n c e n t i v e Plan

( c o l l e c t i v e l y , t h e "Harbor Bank P l a n s " ) . N a t i o n a l C i t y a c q u i r e d Harbor Bank on D e c e m b e r 1 ,

2 0 0 6 . Th e D e c e m b e r 1 , 2006 R e g i s t r a t i o n Statement c o n t a i n e d misleading s t a t e m e n t s and

omissions t h a t v i o l a t e d t h e S e c u r i t i e s Act of 1933 ("1933 A c t " ) . This a c t i o n i n v o l v e s s o l e l y s t r i c t

l i a b i l i t y and n e g l i g e n c e c l a i m s under 1933 A c t . P l a i n t i f f s e x p r e s s l y exclude and d i s c l a i m any

a l l e g a t i o n t h a t could be c o n s t r u e d a s a l l e g i n g f r a u d o r i n t e n t i o n a l o r r e c k l e s s misconduct.

2 . Defendant N a t i o n a l C i t y i s a f i n a n c i a l holding c o m p a n y t h a t p r o v i d e s commercial

and r e t a i l b a n k i n g , mortgage f i n a n c i n g and s e r v i c i n g , consumer f i n a n c e , and a s s e t ma na g e me nt

s e r v i c e s i n t h e United S t a t e s . Th e C o m p a n y i s headquartered i n C l e v e l a n d , O h i o . On D e c e m b e r 1 ,

2 0 0 6 , N a t i o n a l C i t y caused a R e g i s t r a t i o n Statement t o b e f i l e d with t h e SEC s o t h a t i t c o u l d o f f e r

2 . 4 m i l l i o n s h a r e s of common s t o c k t o i t s employees i n t h e Harbor Bank P l a n s . T h i s w as a " p u b l i c

o f f e r i n g " of N a t i o n a l C i t y s t o c k , a s t h a t term has been d e f i n e d b y t h e U . S . Sup re me C o u r t .

3 . Th e R e g i s t r a t i o n Statement w as m a t e r i a l l y f a l s e and misleading i n t h a t i t i n c l u d e d

misleading and i n a c c u r a t e s t a t e m e n t s a n d / o r f a i l e d t o d i s c l o s e : ( i ) t h e f a c t t h a t t h e Company's

p o r t f o l i o of c o l l a t e r a l i z e d d e b t o b l i g a t i o n s ("CDOs"), many of w h ic h were backed b y su b p r i me

mortgage l o a n s , w as dangerously overexposed t o r i s k y and impaired CDOs; ( i i ) t h e f a c t t h a t t h e

1



C o m p a n y h ad f a i l e d t o p r o p e r l y account f o r i t s h i g h l y l e v e r a g e d l o a n s and mortgage s e c u r i t i e s ; ( i i i )

t h e e x t e n t t o w h ic h N a t i o n a l C i t y w a s exposed t o s e c u r i t i e s backed b y a d j u s t a b l e r a t e mor t gages

("ARMS"), w h ic h would b e t o x i c t o t h e C o m p a n y once housing p r i c e s s t o p p e d i n c r e a s i n g a t a r a p i d

p a c e ; ( i v ) t h e f a c t t h a t t h e C o m p a n y w as u s i n g dangerously high l e v e l s of l e v e r a g e t o prop u p i t s

f i n a n c i a l r e s u l t s , t h e r e b y exposing t h e C o m p a n y t o a s e v e r e l i q u i d i t y c r i s i s ; ( v ) t h e f a c t t h a t t h e

Company's l i q u i d i t y p o s i t i o n h ad d e t e r i o r a t e d t o dangerously lo w l e v e l s .

4 . Th e t r u e f a c t s w e r e : ( i ) N a t i o n a l C i t y ' s p o r t f o l i o of CDOs c o n t a i n e d b i l l i o n s of

d o l l a r s w or t h of impaired and r i s k y s e c u r i t i e s , m a n y of w h ic h were backed b y su b p r i me mortgage

l o a n s ; ( i i ) t h e C o m p a n y h ad f a i l e d t o p r o p e r l y account f o r h i g h l y l e v e r a g e d l o a n s i n i t s p o r t f o l i o ;

( i i i ) N a t i o n a l C i t y h ad b een h e a v i l y involved i n mortgages t h a t i n c l u d e d pay-option ARMs. These

pay-option ARMs provided t h a t , d u r i n g t h e i n i t i a l term of t h e l o a n , borrowers could p ay only a s

m u c h a s t h e y d e s i r e d with any underpayment being added t o t h e l o a n b a l a n c e . These l o a n s would

b e c o m e t o x i c ( f o r both N a t i o n a l C i t y and t h e borrowers) o nce h o us e p r i c e s stopped i n c r e a s i n g a t a

r a p i d r a t e ; ( i v ) N a t i o n a l C i t y w as using f i n a n c i a l l e v e r a g e a t d an g er o usly h i gh l e v e l s , w h i c h

exposed t h e C o m p a n y t o a s e v e r e l i q u i d i t y c r i s i s ; and ( v ) t h e C o m p a n y h ad t a k e n dangerous r i s k s

and h ad allowed i t s r i s k ma na g e me nt p r a c t i c e s t o d e t e r i o r a t e .

5 . Th e R e g i s t r a t i o n Statement w a s a l s o m a t e r i a l l y misleading and i n a c c u r a t e i n t h a t i t

i n c l u d e d misleading and i n a c c u r a t e s t a t e m e n t s a n d / o r f a i l e d t o d i s c l o s e m a t e r i a l i n f o r m a t i o n about

N a t i o n a l C i t y ' s l o a n o r i g i n a t i o n and l e n d i n g p r a c t i c e s . I n p a r t i c u l a r , t h e R e g i s t r a t i o n S t a t e m e n t

m a d e m a t e r i a l l y misleading s t a t e m e n t s a n d / o r f a i l e d t o d i s c l o s e : ( i ) t h a t t h e Defendants h ad

d i s r e g a r d e d p u b l i c l y s t a t e d u n d e r w r i t i n g and l o a n - o r i g i n a t i o n p r a c t i c e s t o a r t i f i c i a l l y i n f l a t e

r e p o r t e d income, e a r n i n g s and l o a n volume; ( i i ) t h a t t h e Company h ad m a d e a s u b s t a n t i a l amount of

l o a n s w i t h o u t r e q u i r i n g documentation confirming t h e c r e d i t - w o r t h i n e s s of b o r r o w e r s ; ( i i i ) t h a t t h e

2



Company lacked t h e r e q u i s i t e i n t e r n a l c o n t r o l s t o d e t e r m i n e a p p r o p r i a t e allowance f o r l o a n l o s s e s ;

( i v ) t h a t t h e Company u n d e r s t a t e d r e s e r v e s and a l l o w a n c e s f o r l o a n l o s s e s w h i c h d i d n o t p r o p e r l y

r e f l e c t t h e r i s k f a c i n g t h e C o m p a n y f o r t h e p ur po se o f a r t i f i c i a l l y i n f l a t i n g t h e Company's r e p o r t e d

income and e a r n i n g s ; ( v ) t h a t t h e C o m p a n y improperly m i s c h a r a c t e r i z e d h i g h - r i s k , low-

documentation l o a n s a s p r i me l o a n s a s opposed t o sub-prime l o a n s ; ( v i ) t h a t t h e Company engaged

i n p r e d a t o r y lending p r a c t i c e s ; ( v i i ) t h a t t h e Company's p u r p o r t e d f i n a n c i a l s u c c e s s w as t h e r e s u l t

of a g g r e s s i v e l y and improperly o r i g i n a t i n g r i s k y l o a n s , w i t h o u t r e g a r d t o i t s s t a t e d underwriting and

o r i g i n a t i o n p o l i c i e s , and w i t h o u t t a k i n g adequate r e s e r v e s t o r e f l e c t t h e r i s k s a s s o c i a t e d with such

l o a n s ; and ( v i i i ) t h a t t h e C o m p a n y d i d n o t p r o p e r l y value and f a i l e d t o d i s c l o s e t h e i n e f f e c t i v e n e s s

of i t s hedging with r e s p e c t t o l o a n s h e l d f o r s a l e , MSRs and r e t a i n e d i n t e r e s t s .

6 . Th e t r u e f a c t s w e r e :

A. Defendants w e r e o r i g i n a t i n g , s e c u r i t i z i n g and s e l l i n g mortgage l o a n s

t o borrowers w h o: ( i ) d i d n o t meet t h e prudent o r maximum debt-to-income r a t i o

purportedly r e q u i r e d b y t h e Defendants; ( i i ) d i d n o t p r o v i d e adequate documentation t o

s u p p o r t t h e income and a s s e t s r e q u i r e d t o i s s u e t h e l o a n s p u r s u a n t t o t h e Defendants' own

g u i d e l i n e s ; ( i i i ) were s t e e r e d t o s t a t e d i n c o m e / a s s e t and lo w documentation mortgage l o a n s

b y N a t i o n a l C i t y , N a t i o n a l C i t y ' s c o r r e s p o n d e n t s o r i t s a g e n t s , such a s mortgage b r o k e r s ,

because t h e borrowers c o u l d n o t q u a l i f y t h e mortgage l o a n s t h a t r e q u i r e d f u l l

documentation; and ( i v ) d i d n o t have t h e income o r a s s e t s r e q u i r e d b y t h e i t s own g u i d e l i n e s

t o a f f o r d t h e r e q u i r e d mortgage l o a n payments, w h i c h r e s u l t e d i n a mismatch between t h e

needs and c a p a c i t y of t h e b o r r o w e r s ;

B . That t h e Defendants and Defendants' a g e n t s knew t h a t t h e borrowers

e i t h e r could n o t provide t h e r e q u i r e d documentation o r t h e borrowers r e f u s e d t o provide i t ;

3



C . T h a t , i n f a c t , t h e u n d e r w r i t i n g , q u a l i t y c o n t r o l , and d u e d i l i g e n c e

p r a c t i c e s and p o l i c i e s u t i l i z e d i n c o n n e c t i o n with t h e a p p r o v a l and funding of t h e mortgage

l o a n s were s o w e ak t h a t borrowers were being extended l o a n s based on s t a t e d inc o me i n t h e

mortgage l o a n a p p l i c a t i o n s with p u r p o r t e d income amounts t h a t c o u l d n o t p o s s i b l y be

r e c o n c i l e d with t h e j o b s claimed on t h e l o a n a p p l i c a t i o n o r through a ch eck o f f r e e " o n l i n e "

s a l a r y d a t a b a s e s such a s s a i a r y . c o m ; and

D. That t h e a p p r a i s a l s of m a n y p r o p e r t i e s w e r e i n f l a t e d , a s a p p r a i s e r s

were induced b y D ef end ant s a nd Defendants' c o r r e s p o n d e n t s a n d / o r t h e i r mortgage

b r o k e r s / a g e n t s , t o provide t h e d e s i r e d a p p r a i s a l v a l u e r e g a r d l e s s of t h e a c t u a l v a l u e of t h e

u n d e r l y i n g p r o p e r t y s o t h e l o a n s would be ap p roved and f u n d e d . I n t h i s w a y m a n y

a p p r a i s e r s w er e r ew ar de d f o r t h e i r w i l l i n g n e s s t o s u p p o r t preconceived o r predetermined

p r o p e r t y v a l u e s v i o l a t i n g USPAP r e g u l a t i o n s . '

7 . As a r e s u l t of t h e misleading and i n a c c u r a t e s t a t e m e n t s a n d/ o r omissions i n t h e

R e g i s t r a t i o n S t a t e m e n t , t h e v a l u e of N a t i o n a l C i t y common s t o c k w as a r t i f i c i a l l y i n f l a t e d . Th e

N a t i o n a l C i t y s h a r e s o f f e r e d p u r s u a n t t o t h e D e c e m b e r 1 , 2006 R e g i s t r a t i o n Statement w e r e w or t h

no w he re n e a r t h e i r D e c e m b e r 1 , 2006 v a l u e of $36.05 p e r s h a r e . Since r e c e i v i n g t h e i r National C i t y

s h a r e s , P l a i n t i f f s and m e m b e r s of t h e c l a s s have seen t h e v a l u e of t h o s e s h a r e drop b y over 75%.

1 Th e Uniform S t a n d a r d s of P r o f e s s i o n a l A p p r a i s a l P r a c t i c e ("USPAP") a r e t h e

g e n e r a l l y a c c e p t e d s t a n d a r d s f o r p r o f e s s i o n a l a p p r a i s a l p r a c t i c e i n North America. USPAP c o n t a i n s

s t a n d a r d s f o r a l l t y p e s of a p p r a i s a l s e r v i c e s . Standards a r e i n c l u d e d f o r r e a l e s t a t e , p e r s o n a l

p r o p e r t y , b u s i n e s s and mass a p p r a i s a l .

4



JURISDICTION AND VENUE

8 . Th e c l a i m s a l l e g e d h e r e i n a r i s e under § § 1 1 , 1 2 ( a ) ( 2 ) and 1 5 of t h e 1933 A c t . See 1 5

U.S.C. § §7 7k, 7 71 ( a ) ( 2 ) and 77o . J u r i s d i c t i o n i s c o n f e r r e d b y § 22 of t h e 1933 Ac t and venue i s

pro per pursuant t o §22 of t h e 1933 A c t . S e c t i o n 22 of t h e 1933 Ac t e x p l i c i t l y s t a t e s t h a t " [ e ] x c e p t a s

provided i n s e c t i o n 1 6 ( c ) , no c a s e a r i s i n g under t h i s t i t l e and brought i n any S t a t e c o u r t of

competent j u r i s d i c t i o n s h a l l be r e mo v e d t o any c o u r t i n t h e United S t a t e s . " S e c t i o n 1 6 ( c ) r e f e r s t o

"covered c l a s s a c t i o n s , " which a r e d e f i n e d a s l a w s u i t s brought a s c l a s s a c t i o n s o r brought on behalf

of m o r e t h a n 50 p e r s o n s a s s e r t i n g c l a i m s under s t a t e o r common l a w . This i s an a c t i o n a s s e r t i n g

f e d e r a l law c l a i m s . Thus, i t does n o t f a l l w i t h i n t h e d e f i n i t i o n o f "co ve re d c l a s s a c t i o n " under

§ 1 6 ( b ) - ( c ) and t h e r e f o r e i s n o t removable t o f e d e r a l c o u r t .

9 . Th e v i o l a t i o n s of la w complained of h e r e i n occurred i n t h i s County, i n c l u d i n g t h e

p r e p a r a t i o n and d i s s e m i n a t i o n of t h e m a t e r i a l l y f a l s e and misleading R e g i s t r a t i o n Statement

complained of h e r e i n , w h ic h s t a t e m e n t s w e r e disseminated i n t o t h i s County. N a t i o n a l C i t y , each of

t h e I n d i v i d u a l D e f en d an t s and E r n s t & Y o u n g conduct b u s i n e s s i n t h i s County.

PARTIES

1 0 . P l a i n t i f f s L i s a Parker and Stephen Enns, former N a t i o n a l C i t y and Har bor Bank

employees, a c q u i r e d t h e common s t o c k of N a t i o n a l City p u r s u a n t o r t r a c e a b l e t o t h e D e c e m b e r 1 ,

2006 R e g i s t r a t i o n Statement and h av e b ee n d a m a g e d t h e r e b y .

1 1 . Defendant N a t i o n a l C i t y i s a f i n a n c i a l holding company, p r o v i d e s commercial and

r e t a i l b a n k i n g , mortgage f i n a n c i n g and s e r v i c i n g , consumer f i n a n c e , and a s s e t mana ge ment s e r v i c e s

i n t h e United S t a t e s . Th e C o m p a n y i s headquartered i n C l e v e l a n d , O h i o .

5



1 2 . Defendant David A. Daberko ("Daberko") s e r v e d a s N a t i o n a l C i t y ' s Chairman of t h e

Board of D i r e c t o r s and Chief E x e c u t i v e O f f i c e r d u r i n g t h e r e l e v a n t p e r i o d . Defendant Daberko

s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

1 3 . Defendant J e f f r e y D. K e l l y ( " K e l l y " ) s e r v e d a s N a t i o n a l C i t y ' s Vice-Chairman and

Chief F i n a n c i a l O f f i c e r d u r i n g t h e r e l e v a n t p e r i o d . Defendant Kelly s i g n e d t h e R e g i s t r a t i o n

S t a t e m e n t .

1 4 . Defendant Thomas A. Richlovsky ("Richlovsky " ) s e r v e d a s N a t i o n a l C i t y ' s S e n i o r

Vice P r e s i d e n t and T r e a s u r e r d u r i n g t h e r e l e v a n t p e r i o d . D e fe nd a nt Ri ch lo v sky s i g n e d t h e

Registration Statement.

1 5 . Defendant Jo n E . B a r f i e l d ( " B a r f i e l d " ) s e r v e d a s a N a t i o n a l C i t y D i r e c t o r d u r i n g t h e

r e l e v a n t p e r i o d . Defendant B a r f i e l d s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

1 6 . Defendant James S . Broadhurst ( " B r o a d h u r s t " ) s e r v e d a s a N a t i o n a l C i t y D i r e c t o r

d u r i n g t h e r e l e v a n t p e r i o d . Defendant Broadhurst s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

1 7 . Defendant C h r i s t o p h e r M. Connor ("Connor") s e r v e d a s a N a t i o n a l C i t y D i r e c t o r

d u r i n g t h e r e l e v a n t p e r i o d . Defendant Connor s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

1 8 . Defendant Bernadine P . Healy ( " H e a l y " ) s e r v e d a s a National C i t y D i r e c t o r d u r i n g

t h e r e l e v a n t p e r i o d . Defendant Healy s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

1 9 . Defendant S . Craig Lindner ( " L i n d e r " ) s e r v e d a s a N a t i o n a l C i t y D i r e c t o r d u r i n g t h e

r e l e v a n t p e r i o d . Defendant Lindner s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

2 0 . Defendant P a u l A. O rm o n d ("Ormond") s e r v e d a s a National C i t y D i r e c t o r d u r i n g

t h e r e l e v a n t p e r i o d . Defendant O r m o n d s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

2 1 . Defendant Gerald L . Shaheen ("Shaheen") served a s a N a t i o n a l C i t y D i r e c t o r d u r i n g

t h e r e l e v a n t p e r i o d . Defendant Shaheen s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

6



2 2 . Defendant J e r r y Su e Th or nt on ( " T h o r n t o n " ) s e r v e d a s a N a t i o n a l C i t y D i r e c t o r

d u r i n g t h e r e l e v a n t p e r i o d . Defendant Thornton s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

2 3 . Defendant Morry Weiss ("Weiss") s e r v e d a s a N a t i o n a l C i t y D i r e c t o r d u r i n g t h e

r e l e v a n t p e r i o d . Defendant Weiss s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

2 4 . Defendant David L . Z o e l l e r s e r v e d a s N a t i o n a l C i t y ' s Executive Vice P r e s i d e n t and

General Counsel d u r i n g t h e r e l e v a n t p e r i o d . Defendant Z o e l l e r s i g n e d t h e R e g i s t r a t i o n S t a t e m e n t .

2 5 . Defendants Daberko, K e l l y , R i c h l o v s k y , B a r f i e l d , B r o a d h u r s t , Connor, H e a l y ,

L i n d n e r , Ormo nd, Shaheen, Tho rnton, Weiss and Z o e l l e r a r e c o l l e c t i v e l y r e f e r r e d t o i n t h i s

Complaint a s t h e " I n d i v i d u a l Defendants."

2 6 . Defendant E r n s t & Y o u n g ( " E r n s t & Young") i s an i n t e r n a t i o n a l accounting and

a u d i t i n g f i r m t h a t s e r v e d a s N a t i o n a l C i t y ' s a u d i t o r s d u r i n g t h e r e l e v a n t p e r i o d . I n an e x h i b i t t o t h e

R e g i s t r a t i o n S t a t e m e n t , E r n s t & Y o u n g consented t o t h e i n c o r p o r a t i o n of i t s a u d i t e d f i n a n c i a l

s t a t e m e n t s i n t o t h e R e g i s t r a t i o n S t a t e m e n t . S p e c i f i c a l l y , E r n s t & Y o u n g s t a t e d :

We c o n s e n t t o t h e i n c o r p o r a t i o n b y r e f e r e n c e i n t h e P o s t - E f f e c t i v e A m e n d m e n t No. 1

on F o r m S - 8 t o t h e R e g i s t r a t i o n Statement ( Fo r m S - 4 No . 333-137205) of ou r r e p o r t sd a t e d February 3 , 2 0 0 6 , with r e s p e c t t o t h e c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t s of

N a t i o n a l C i t y Corporation and s u b s i d i a r i e s , N a t i o n a l C i t y Corporation

management's assessment of t h e e f f e c t i v e n e s s of i n t e r n a l c o n t r o l over f i n a n c i a l

r e p o r t i n g , and t h e e f f e c t i v e n e s s of i n t e r n a l c o n t r o l over f i n a n c i a l r e p o r t i n g of

N a t i o n a l C i t y C o r p o r a t i o n , i n c l u d e d i n i t s Annual Report on F o r m 10 - K f o r t h e y e a r

ended De ce m b e r 3 1 , 2005, f i l e d with t h e S e c u r i t i e s and Exchange Commission.

CLASS ACTION ALLEGATIONS

2 7 . P l a i n t i f f s b r i n g t h i s a c t i o n a s a c l a s s a c t i o n on behalf of a c l a s s c o n s i s t i n g of a l l

persons o r e n t i t i e s who a c q u i r e d s h a r e s of N a t i o n a l C i t y common s t o c k p u r s u a n t a n d / o r t r a c e a b l e t o

t h e Company's R e g i s t r a t i o n Statement and who were d a m a g e d t h e r e b y ( t h e " C l a s s " ) . Excluded

from t h e C l a s s a r e D e f e n d a n t s , m e m b e r s of t h e i r immediate f a m i l i e s and t h e i r l e g a l r e p r e s e n t a t i v e s ,

h e i r s , s u c c e s s o r s o r a s s i g n s and any e n t i t y i n w h ic h Defendants have o r h ad a c o n t r o l l i n g i n t e r e s t .

7



2 8 . Th e m e m b e r s of t h e C l a s s a r e s o numerous t h a t j o i n d e r of a l l m e m b e r s i s

i m p r a c t i c a l . While t h e e x a c t n u m b e r of C l a s s m e m b e r s i s unkno wn t o P l a i n t i f f s a t time and ca n

only b e a s c e r t a i n e d t h ou g h a p p r o p r i a t e d i s c o v e r y , P l a i n t i f f s b e l i e v e s t h a t t h e r e a r e thousands of

m e m b e r s i n t h e proposed C l a s s . Record owners and o t h e r m e m b e r s of t h e C l a s s may be i d e n t i f i e d

from r e c o r d s maintained b y N a t i o n a l C i t y o r i t s t r a n s f e r a g e n t and may be n o t i f i e d of t h e pendency

of t h i s a c t i o n b y m a i l , u s i n g t h e form of n o t i c e s i mi l a r t o t h a t c u s t o m a r i l y used i n s e c u r i t i e s c l a s s

a c t i o n s .

2 9 . P l a i n t i f f s ' c l a i m s a r e t yp i c a l of t h e c l a i m s of t h e m e m b e r s of t h e C l a s s a s a l l

m e m b e r s of t h e C l a s s a r e s i mi l a r l y a f f e c t e d b y Defendants' conduct i n v i o l a t i o n of f e d e r a l la w t h a t

i s complained of h e r e i n .

3 0 . P l a i n t i f f s w i l l f a i r l y and a d e q u a t e l y p r o t e c t t h e i n t e r e s t s of t h e m e m b e r s of t h e C l a s s

a nd h av e r e t a i n e d c o u n s e l competent and experienced i n c l a s s and s e c u r i t i e s l i t i g a t i o n .

3 1 . Common q u e s t i o n s of la w and f a c t e x i s t a s t o a l l m e m b e r s of t h e C l a s s and

predominate over any q u e s t i o n s s o l e l y a f f e c t i n g i n d i v i d u a l m e m b e r s of t h e C l a s s . Among t h e

q u e s t i o n s of la w and f a c t common t o t h e C l a s s a r e : w het her d e f e n d a n t s v i o l a t e d t h e 1933 A c t ;

w het her t h e R e g i s t r a t i o n Statement m i s r e p r e s e n t e d a n d / o r o m i t t e d m a t e r i a l f a c t s about t h e b u s i n e s s ,

o p e r a t i o n s a n d / o r ma na g e me nt of N a t i o n a l C i t y ; and t o what e x t e n t t h e m e m b e r s of t h e C l a s s have

s u s t a i n e d d a ma ges and t h e p r o p e l measure o f d a mag e s.

3 2 . A c l a s s a c t i o n i s s u p e r i o r t o a l l o t h e r a v a i l a b l e methods f o r t h e f a i r and e f f i c i e n t

a d j u d i c a t i o n of t h i s c o n t r o v e r s y s i n c e j o i n d e r of m e m b e r s i s i m p r a c t i c a b l e . There w i l l be no

d i f f i c u l t y i n t h e ma na g e me nt of t h i s a c t i o n a s a c l a s s a c t i o n .

8



THE FALSEAND DEFECTIVE REGISTRATION STATEMENT

3 3 . On D ec embe r 1 , 2 0 0 6 , N a t i o n a l C i t y caused a R e g i s t r a t i o n Statement t o b e f i l e d with

t h e SEC s o t h a t i t c o u l d o f f e r and a l l o c a t e s h a r e s of N a t i o n a l C i t y common s t o c k t o employees i n

t h e Harbor Bank P l a n s . N a t i o n a l C i t y a c q u i r e d Harbor Bank on D e c e m b e r 1 , 2 0 0 6 . P r i o r t o t h e

i s s u a n c e of t h e R e g i s t r a t i o n S t a t e m e n t , Harbor Bank employees h e l d Harbor Bank common s t o c k i n

t h e Harbor Bank P l a n s . According t o t h e R e g i s t r a t i o n S t a t e m e n t , t h e C o m p a n y w as o f f e r i n g and

a l l o c a t i n g Harbor Bank employees 2 . 4 m i l l i o n s h a r e s of N a t i o n a l C i t y s t o c k i n exchange f o r t h e i r

Harbor Bank s t o c k p u r s u a n t t o t h e merger agreement between National C i t y and Harbor Bank.

Thus, t h i s w as a " p u b l i c o f f e r i n g " of N a t i o n a l C i t y s t o c k , a s t h a t term has been d e f i n e d b y t h e U . S .

Sup re me C o u r t .

3 4 . Th e De ce m b e r 1 , 2006 R e g i s t r a t i o n Statement i n c o r p o r a t e d b y r e f e r e n c e N a t i o n a l

C i t y ' f i n a n c i a l s t a t e m e n t s , i n c l u d i n g t h e Company's Annual Report on F o r m 1 0 - K f i l e d with t h e

SEC and t h e Q u a r t e r l y Reports on F o r m 10 -Q f i l e d with t h e SEC.

3 5 . Th e f i n a n c i a l s t a t e m e n t s t h a t were i n c o r p o r a t e d b y r e f e r e n c e i n t o t h e R e g i s t r a t i o n

Statement c o n t a i n e d m islea di ng a nd i n a c c u r a t e s t a t e m e n t s and omitted m a t e r i a l i n f o r m a t i o n

c o n c e r n i n g , a m o n g t h i n g s , N a t i o n a l C i t y ' s l e n d i n g p r a c t i c e s , f i n a n c i a l r e s u l t s , and l i q u i d i t y . I n

p a r t i c u l a r , t h e R e g i s t r a t i o n Statement i n c l u d e d misleading and i n a c c u r a t e s t a t e m e n t s a n d / o r f a i l e d t o

d i s c l o s e t h a t : ( i ) t h e Company's p o r t f o l i o of c o l l a t e r a l i z e d d e b t o b l i g a t i o n s ("CDOs"), m a n y of

w h ic h were backed b y s u b p r i me mortgage l o a n s , w as dangerously overexposed t o r i s k y and

impaired CDOs; ( i i ) t h e f a c t t h a t t h e Company h ad f a i l e d t o p r op erly a ccou nt f o r i t s h i g h l y

l e v e r a g e d l o a n s and mortgage s e c u r i t i e s ; ( i i i ) t h e e xt e n t t o w h ic h National C i t y w as exposed t o

s e c u r i t i e s backed b y a d j u s t a b l e r a t e mortgages ( "ARMs ") , w h i ch w o u ld be t o x i c t o t h e C o m p a n y

once housing p r i c e s stopped i n c r e a s i n g a t a r a p i d p a c e ; ( i v ) t h e f a c t t h a t t h e C o m p a n y w as u s i n g

9



dangerously high l e v e l s of l e v e r a g e t o prop u p i t s f i n a n c i a l r e s u l t s , t h e r e b y exposing t h e C o m p a n y

t o a s e v e r e l i q u i d i t y c r i s i s ; ( v ) t h e f a c t t h a t t h e Company's l i q u i d i t y p o s i t i o n had d e t e r i o r a t e d t o

dangerously lo w l e v e l s .

3 6 . Th e t r u e f a c t s w e r e : ( i ) N a t i o n a l C i t y ' s p o r t f o l i o of CDOs c o n t a i n e d b i l l i o n s of

d o l l a r s worth of impaired and r i s k y s e c u r i t i e s , many of w h ic h were backed b y su b p r i me mortgage

l o a n s ; ( i i ) t h e C o m p a n y h ad f a i l e d t o p r o p e r l y account f o r h i g h l y l e v e r a g e d l o a n s i n i t s p o r t f o l i o ;

( i i i ) N a t i o n a l C i t y had been h e a v i l y i n v o l v e d i n mortgages t h a t i n c l u d e d p a y - o p t i o n ARMs. These

pay-option ARMs provided t h a t , d u r i n g t h e i n i t i a l ter m of t h e l o a n , borrowers c o u l d p ay only a s

much a s they d e s i r e d with any underpayment being added t o t h e l o a n b a l a n c e . These l o a n s would

b e c o m e t o x i c ( f o r both N a t i o n a l C i t y and t h e borrowers) o nce h ou se p r i c e s stopped i n c r e a s i n g a t a

r a p i d r a t e ; ( i v ) N a t i o n a l C i t y w as using f i n a n c i a l l e v e r a g e a t d an ge ro us ly h ig h l e v e l s , which

exposed t h e C o m p a n y t o a s e v e r e l i q u i d i t y c r i s i s ; and ( v ) t h e C o m p a n y had t a k e n dangerous r i s k s

and h ad allowed i t s r i s k ma na g e me nt p r a c t i c e s t o d e t e r i o r a t e t o t h e p o i n t w h e r e a c o l l a p s e of t h e

C o m p a n y w as a p o s s i b i l i t y .

3 7 . Th e R e g i s t r a t i o n Statement w as a l s o m a t e r i a l l y f a l s e and misleading i n t h a t i t

i n c l u d e d misleading and i n a c c u r a t e s t a t e m e n t s a n d / o r f a i l e d t o d i s c l o s e m a t e r i a l i n f o r m a t i o n a b o u t

N a t i o n a l C i t y ' s l o a n o r i g i n a t i o n and l e n d i n g p r a c t i c e s . I n p a r t i c u l a r , t h e R e g i s t r a t i o n Statement

m a d e m a t e r i a l l y misleading s t a t e m e n t s a n d/ o r f a i l e d t o d i s c l o s e : ( i ) t h a t t h e Defendants had

d i s r e g a r d e d p u b l i c l y s t a t e d u n d e r w r i t i n g and l o a n - o r i g i n a t i o n p r a c t i c e s t o a r t i f i c i a l l y i n f l a t e

r e p o r t e d income, e a r n i n g s and l o a n volume; ( i i ) t h a t t h e Company had m a d e a s u b s t a n t i a l amount of

l o a n s w i t h o u t r e q u i r i n g documentation confirming t h e c r e d i t - w o r t h i n e s s of b o r r o w e r s ; ( i i i ) t h a t t h e

C o m p a n y l a c k e d t h e r e q u i s i t e i n t e r n a l c o n t r o l s t o determine a p p r o p r i a t e allowance f o r l o a n l o s s e s ;

( i v ) t h a t t h e C o m p a n y u n d e r s t a t e d r e s e r v e s and allowances f o r l o a n l o s s e s which d i d n o t p r o p e r l y

10



r e f l e c t t h e r i s k f a c i n g t h e C o m p a n y f o r t h e purpose of a r t i f i c i a l l y i n f l a t i n g t h e Company's r e p o r t e d

income and e a r n i n g s ; ( v ) t h a t t h e C o m p a n y improperly m i s c h a r a c t e r i z e d h i g h - r i s k , low-

documentation l o a n s a s p r i me l o a n s a s opposed t o sub-prime l o a n s ; ( v i ) t h a t t h e C o m p a n y engaged

i n p r e d a t o r y l e n d i n g p r a c t i c e s ; ( v i i ) t h a t t h e Company's p u r p o r t e d f i n a n c i a l s u c c e s s w as t h e r e s u l t

of a g g r e s s i v e l y and improperly o r i g i n a t i n g r i s k y l o a n s , w i t h o u t r e g a r d t o i t s s t a t e d u n d e r w r i t i n g and

o r i g i n a t i o n p o l i c i e s , and without t a k i n g a d e q u a t e r e s e r v e s t o r e f l e c t t h e r i s k s a s s o c i a t e d with such

l o a n s ; and ( v i i i ) t h a t t h e C o m p a n y d i d n o t p r o p e r l y v a l u e and f a i l e d t o d i s c l o s e t h e i n e f f e c t i v e n e s s

of i t s hedging with r e s p e c t t o l o a n s h e l d f o r s a l e , MSRs and r e t a i n e d i n t e r e s t s .

3 8 . Th e t r u e f a c t s were:

A. Def endants were o r i g i n a t i n g , s e c u r i t i z i n g and s e l l i n g mortgage l o a n s

t o borrowers w h o: ( i ) d i d n o t meet t h e p r u d e n t o r maximum debt-to-income r a t i o

p u r p o r t e d l y r e q u i r e d b y t h e D e f e n d a n t s ; ( i i ) d i d n o t provide ad eq u at e d o cu m en t at i on t o

s u p p o r t t h e income and a s s e t s r e q u i r e d t o i s s u e t h e l o a n s pursuant t o t h e Defendants' own

g u i d e l i n e s ; ( i i i ) were s t e e r e d t o s t a t e d i n c o m e / a s s e t and lo w documentation mortgage l o a n s

b y N a t i o n a l C i t y , National C i t y ' s c o r r e s p o n d e n t s o r i t s a g e n t s , such a s mortgage b r o k e r s ,

because t h e borrowers c o u l d n o t q u a l i f y t h e mortgage l o a n s t h a t r e q u i r e d f u l l

documentation; and ( i v ) d i d n o t have t h e income o r a s s e t s r e q u i r e d b y t h e i t s own g u i d e l i n e s

t o a f f o r d t h e r e q u i r e d mortgage l o a n payments, w h i c h r e s u l t e d i n a m i sm a tc h b et w ee n t h e

needs and c a p a c i t y of t h e b o r r o w e r s ;

B . That t h e Defendants and Defendants' a g e n t s kne w t h a t t h e borrowers

e i t h e r c o u l d n o t provide t h e r e q u i r e d documentation o r t h e b or rowers r e f u s e d t o provide i t ;

C . T h a t , i n f a c t , t h e u n d e r w r i t i n g , q u a l i t y c o n t r o l , and due d i l i g e n c e

p r a c t i c e s and p o l i c i e s u t i l i z e d i n connection with t h e a p p r o v a l and funding of t h e mortgage

1 1



l o a n s were s o w e a k t h a t borrowers were being extended l o a n s based on s t a t e d inc o me i n t h e

mortgage l o a n a p p l i c a t i o n s with p u r p o r t e d income amounts t h a t could n o t p o s s i b l y b e

r e c o n c i l e d with t h e j o b s claimed on t h e l o a n a p p l i c a t i o n o r through a check of f r e e " o n l i n e "

s a l a r y d a t a b a s e s such a s s a l a r y . c o m ; and

D . That t h e a p p r a i s a l s of m a n y p r o p e r t i e s were i n f l a t e d , a s a p p r a i s e r s

were induced b y Defendants and Defendants' c o r r e s p o n d e n t s a n d / o r t h e i r mortgage

b r o k e r s / a g e n t s , t o provide t h e d e s i r e d a p p r a i s a l value r e g a r d l e s s of t h e a c t u a l value of t h e

underlying p r o p e r t y s o t h e l o a n s would b e ap p roved and f u n d e d . I n t h i s way m a n y

a p p r a i s e r s were rewarded f o r t h e i r w i l l i n g n e s s t o s u p p o r t preconceived o r predetermined

p r o p e r t y v a l u e s v i o l a t i n g USPAP r e g u l a t i o n s .

RELIANCE PRESUMED

3 9 . Because P l a i n t i f f s and m e m b e r s of t h e C l a s s a c q u i r e d t h e i r N a t i o n a l C i t y s h a r e s

p r i o r t o t h e i s s u a n c e of an e a r n i n g s s t a t e m e n t covering a 12 m o n t h p e r i o d a f t e r t h e i s s u a n c e of t h e

R e g i s t r a t i o n Statement , r e l i a n c e on t h e R e g i s t r a t i o n Statement i s p r e s u m e d under t h e 1933 A c t .

THE TRUTH EMERGES

4 0 . By making misleading and i n a c c u r a t e s t a t e m e n t s and f a i l i n g t o d i s c l o s e m a t e r i a l

i n f o r m a t i o n a b o u t N a t i o n a l C i t y ' s b u s i n e s s , Defendants p r e s e n t e d an i n a c c u r a t e p i c t u r e of t h e

Company's b u s i n e s s and p r o s p e c t s i n t h e R e g i s t r a t i o n Statement and t h e documents t h a t were

i n c o r p o r a t e d b y r e f e r e n c e t h e r e i n . I n s t e a d of t r u t h f u l l y d i s c l o s i n g t h a t N a t i o n a l C i t y ' s b u s i n e s s w as

n o t a s h e a l t h y a s r e p r e s e n t e d , N a t i o n a l C i t y o v e r s t a t e d i t s n e t income, and f a l s e l y concealed t h e

problems with i t s l o a n p o r t f o l i o . D e f e n d a n t s ' f a l s e and misleading s t a t e m e n t s caused National C i t y

s t o c k t o t r a d e a t a r t i f i c i a l l y i n f l a t e d l e v e l s , t h e r e b y d a ma g ing t h e c l a s s m e m b e r s who a c q u i r e d

N a t i o n a l C i t y s t o c k p u r s u a n t t o t h e R e g i s t r a t i o n S t a t e m e n t .

1 2



4 1 . Th e t r u t h a b o u t N a t i o n a l C i t y ' s t r u e f i n a n c i a l c o n d i t i o n l e a k e d i n t o t h e market

between Au gu st 2 00 7 and A p r i l 2 0 0 8 . T h i s culminated with Defendants' s t u n n i n g d i s c l o s u r e on

January 2 , 2008 i n which Defendants p u b l i c l y d i s c l o s i n g massive a n t i c i p a t e d l o s s e s i n t h e

Company's h o m e l o a n p o r t f o l i o . A l l t o g e t h e r , N a t i o n a l C i t y ' s s t o c k p r i c e h a s drop ped over 75%

s i n c e P l a i n t i f f s and t h e c l a s s r e c e i v e d t h e i r N a t i o n a l C i t y s h a r e s .

4 2 . Th e d r o p s i n N a t i o n a l C i t y s t o c k d u r i n g t h e r e l e v a n t p e r i o d r e mo v e d t h e a r t i f i c i a l

i n f l a t i o n f rom N a t i o n a l C i t y ' s s t o c k p r i c e , c a u s i n g r e a l economic l o s s t o employees w h o a c q u i r e d

s t o c k p u r s u a n t t o t h e R e g i s t r a t i o n S t a t e m e n t .

FIRSTCAUSE OFACTION

V i o l a t i o n s o f t h e o f t h e 1933 Ac t

Against A l l Defendants

4 3 . P l a i n t i f f s r e p e a t and r e a l l e g e each and every a l l e g a t i o n c o n t a i n e d a b o v e .

4 4 . T h i s Count i s brought p u r s u a n t t o § 1 1 of t h e 1933 A c t , 1 5 USC. § 7 7 k , on b e h a l f of

t h e C l a s s , a g a i n s t a l l D e f e n d a n t s . For p ur poses of t h i s Cause of A c t i o n , P l a i n t i f f s e x p r e s s l y

e x c l u d e s and d i s c l a i m s any a l l e g a t i o n t h a t could b e c o n s t r u e d a s a l l e g i n g f r a u d o r i n t e n t i o n a l o r

r e c k l e s s misconduct, a s t h i s Cause o f Act i on i s based s o l e l y on c l a i m s of s t r i c t l i a b i l i t y a n d / o r

n e g l i g e n c e under t h e 1933 A c t .

4 5 . Th e R e g i s t r a t i o n Statement w as f a l s e and m i s l e a d i n g , c o n t a i n e d u n t r u e s t a t e m e n t s of

m a t e r i a l f a c t s , o m i t t e d t o s t a t e o t h e r f a c t s necessary t o m a k e t h e s t a t e m e n t s m a d e n o t m i s l e a d i n g ,

and o m i t t e d t o s t a t e m a t e r i a l f a c t s r e q u i r e d t o be s t a t e d t h e r e i n .

4 6 . N a t i o n a l C i t y i s t h e r e g i s t r a n t f o r t h e O f f e r i n g . As i s s u e r of t h e s h a r e s , N a t i o n a l C i t y

i s s t r i c t l y l i a b l e t o P l a i n t i f f s and t h e C l a s s f o r t h e misstatements and o m i s s i o n s .

4 7 . Th e I n d i v i d u a l Defendants n a m e d h e r e i n w e r e r e s p o n s i b l e f o r t h e c o n t e n t s and

d i s s e m i n a t i o n o f t h e R e g i s t r a t i o n S t a t e m e n t . Each of t h e I n d i v i d u a l Defendants s i g n e d o r

1 3



a u t h o r i z e d t h e s i g n i n g of t h e R e g i s t r a t i o n S t a t e m e n t , and E r n s t & Y o u n g consented t o t h e

i n c o r p o r a t i o n of t h e a u d i t e d f i n a n c i a l s t a t e m e n t s i n t o t h e R e g i s t r a t i o n S t a t e m e n t . Th e I n d i v i d u a l

Defendants and E r n s t & Y o u n g d i d n o t m a ke a r e a s o n a b l e i n v e s t i g a t i o n and d i d n o t p o s s e s s

r e a s o n a b l e grounds f o r t h e b e l i e f t h a t t h e s t a t e m e n t s c o n t a i n e d i n t h e R e g i s t r a t i o n Statement were

t r u e and without o m i s s i o n s of any m a t e r i a l f a c t s and were n o t m i s l e a d i n g .

4 8 . By r e a s o n of t h e conduct h e r e i n a l l e g e d , eac h D e f end ant v i o l a t e d , a n d / o r c o n t r o l l e d a

person who v i o l a t e d , § 1 1 of t h e 1933 A c t .

4 9 . P l a i n t i f f s a c q u i r e d N a t i o n a l C i t y s h a r e s p u r s u a n t a n d / o r t r a c e a b l e t o t h e R e g i s t r a t i o n

Statement f o r t h e O f f e r i n g s .

5 0 . P l a i n t i f f s and t h e C l a s s have s u s t a i n e d damages. At t h e time they r e c e i v e d N a t i o n a l

C i t y s h a r e s , P l a i n t i f f s and o t h e r m e m b e r s of t h e C l a s s were without knowledge of t h e f a c t s

concerning t h e w r on g f ul c on du ct a l l e g e d h e r e i n and c o u l d n o t have reasonably discovered t h o s e

f a c t s p r i o r t o Ma rch 1 7 , 2008. Less t h a n one y e a r h a s e l a p s e d from t h e time t h a t P l a i n t i f f s

d i s c o v e r e d o r reasonably c o u l d have d i s c o v e r e d t h e f a c t s u p o n w h i c h t h i s complaint i s based t o t h e

time t h a t P l a i n t i f f s f i l e d t hi s c o m p l a i n t . Less t han t h r e e y e a r s e l a p s e d between t h e time t h a t t h e

s e c u r i t i e s u p o n w h i c h t h i s Count i s brought w e re o f f e r e d t o t h e p u b l i c and t h e time P l a i n t i f f s f i l e d

t h i s Complaint.

SECOND CAUSE OFACTION

Violations o f § 1 2 ( a ) ( 2 ) of t h e 1933 Ac t

Against All Defendants

5 1 . P l a i n t i f f s r e p e a t and r e a l l e g e t h e a l l e g a t i o n s s e t f o r t h above a s i f s e t f o r t h f u l l y

h e r e i n . For purposes of t h i s Cause of A c t i o n , P l a i n t i f f s e x p r e s s l y exclude and d i s c l a i m any

a l l e g a t i o n t h a t c o u l d be c o n s t r u e d a s a l l e g i n g f r a u d o r i n t e n t i o n a l o r r e c k l e s s misconduct, a s t h i s

Cause of Action i s based s o l e l y on c l a i m s of s t r i c t l i a b i l i t y a n d / o r n e g l i g e n c e under t h e 1933 A c t .

14



5 2 . By means of t h e d e f e c t i v e R e g i s t r a t i o n S t a t e m e n t , Defendants a s s i s t e d i n t h e s a l e of

s h a r e s of t h e Company's s e c u r i t i e s t o P l a i n t i f f s and o t h e r m e m b e r s of t h e C l a s s .

5 3 . Th e R e g i s t r a t i o n S t a t e m e n t c o n t a i n e d u n t r u e s t a t e m e n t s of m a t e r i a l f a c t , and

concealed and f a i l e d t o d i s c l o s e t h e m a t e r i a l f a c t s , a s d e t a i l e d a b o v e . Defendants o w e d P l a i n t i f f s

and t h e o t h e r m e m b e r s of t h e C l a s s w h o a c q u i r e d N a t i o n a l C i t y s e c u r i t i e s p u r s u a n t t o t h e

R e g i s t r a t i o n Statement t h e duty t o make a r e a s o n a b l e and d i l i g e n t i n v e s t i g a t i o n of t h e s t a t e m e n t s

c o n t a i n e d i n t h e R e g i s t r a t i o n S t a t e m e n t t o e n s u r e t h a t such s t a t e m e n t s were t r u e and t h a t t h e r e w as

no omission t o s t a t e a m a t e r i a l f a c t r e q u i r e d t o b e s t a t e d i n o r d e r t o m a ke t h e s t a t e m e n t s c o n t a i n e d

t h e r e i n n o t m i s l e a d i n g . Defendants, i n t h e e x e r c i s e of r e a s o n a b l e c a r e , should have k n o w n of t h e

misstatements and omissions c o n t a i n e d i n t h e R e g i s t r a t i o n Statement a s s e t f o r t h a b o v e .

5 4 . P l a i n t i f f s d i d n o t know, nor i n t h e e x e r c i s e of r e a s o n a b l e d i l i g e n c e c o u l d have

known, of t h e u n t r u t h s and omissions c o n t a i n e d i n t h e R e g i s t r a t i o n Statement a t t h e time he

a c q u i r e d t h e Company's s e c u r i t i e s .

5 5 . By reason of t h e conduct a l l e g e d h e r e i n , Defendants v i o l a t e d § 1 2 ( a ) ( 2 ) of t h e 1933

A c t . As a d i r e c t a nd p r oxi m at e r e s u l t of s u c h v i o l a t i o n s , P l a i n t i f f s and t h e o t h e r m e m b e r s of t h e

C l a s s who a c q u i r e d N a t i o n a l C i t y common s t o c k p u r s u a n t t o t h e R e g i s t r a t i o n Statement s u s t a i n e d

s u b s t a n t i a l d a ma ges i n connection with t h e i r a c q u i s i t i o n of t h e National C i t y s h a r e s . Accordingly,

P l a i n t i f f s and t h e o t h e r m e m b e r s of t h e C l a s s who hold such s h a r e s have t h e r i g h t t o r e s c i n d and

r e c o v e r t h e c a s h value of t h e c o n s i d e r a t i o n exchanged f o r t h e i r s h a r e s , and hereby t e n d e r t h e i r

s h a r e s t o t h e Defendants.

THIRD CAUSE OFACTION

V i o l a t i o n s o f § 15 o f t h e 1933 Act

Against t h e Individual Defendants

5 6 . P l a i n t i f f s r e p e a t and r e a l l e g e each and every a l l e g a t i o n c o n t a i n e d a b o v e .

1 5



5 7 . T h i s Cause o f Act io n i s brought p u r s u a n t t o § 15 of t h e 1933 Act a g a i n s t t h e

I n d i v i d u a l D e f e n d a n t s . For purposes of t h i s Cause of A c t i o n , P l a i n t i f f s e x p r e s s l y e x c l u d e and

d i s c l a i m any a l l e g a t i o n t h a t c o u l d b e c o n s t r u e d a s a l l e g i n g f r a u d o r i n t e n t i o n a l o r r e c k l e s s

misconduct, a s t h i s Cause of Action i s based s o l e l y on c l a i m s of s t r i c t l i a b i l i t y a n d / o r n e g l i g e n c e

under t h e 1933 A c t .

5 8 . Each of t h e I n d i v i d u a l Defendants w as a c o n t r o l person of N a t i o n a l C i t y b y v i r t u e of

h i s o r h e r p o s i t i o n a s a d i r e c t o r , s e n i o r o f f i c e r a n d / o r major s h a r e h o l d e r s of N a t i o n a l C i t y , which

allowed each of t h e s e Defendants t o e x e r c i s e c o n t r o l over N a t i o n a l C i t y and i t s o p e r a t i o n s .

5 9 . Each of t h e I n d i v i d u a l Defendants w as a c u l p a b l e p a r t i c i p a n t i n t h e v i o l a t i o n s of § 1 1

of t h e 1933 Ac t a l l e g e d i n t h e Cause of Action a b o v e , based on t h e i r having s i g n e d o r a u t h o r i z e d

t h e s i g n i n g of t h e R e g i s t r a t i o n Statement a nd h av in g o t h e r w i s e p a r t i c i p a t e d i n t h e p r o c e s s which

allowed t h e O f f e r i n g s t o be s u c c e s s f u l l y c o m p l e t e d .

PRAYERFORRELIEF

WHEREFORE, P l a i n t i f f s pray f o r r e l i e f and judgment, a s f o l l o w s :

A. Determining t h a t t h i s a c t i o n i s a proper c l a s s a c t i o n and c e r t i f y i n g P l a i n t i f f s a s C l a s s

r e p r e s e n t a t i v e s ;

B. Awar d ing compensatory d a ma ges i n f a v o r of P l a i n t i f f s and t h e o t h e r C l a s s m e m b e r s

a g a i n s t a l l D e f e n d a n t s , j o i n t l y and s e v e r a l l y , f o r a l l d a ma ges s u s t a i n e d a s r e s ul t of Defendants'

wrongdoing, i n an amount t o b e p r ov en a t t r i a l , i n c l u d i n g i n t e r e s t t h e r e o n ;

C. Awar d ing P l a i n t i f f s and t h e C l a s s t h e i r reasonable c o s t s and expenses i n c u r r e d i n

t h i s a c t i o n , i n c l u d i n g c o u n s e l f e e s and e x p e r t f e e s ;

D. Awar d ing r e s c i s s i o n o r a r e s c i s s o r y measure of damages; and

E. Such e q u i t a b l e / i n j u n c t i v e o r o t h e r r e l i e f a s d e e m e d a p p r o p r i a t e b y t h e C o u r t .

16



JURY DEMAND

P l a i n t i f f s hereby d e m a n d a t r i a l b y j u r y .

DATED: A p r i l 1 8 , 2008 R e s p e c t f u l l y s u b m i t t e d ,

SCOTT + SCOTT LLP

GEOFFREY M. JOHNSON (#072083)

WALTER W. NOSS (#072784)

1 2 43 4 Ce d ar Road, S u i t e 1 2

Cleveland H e i g h t s , Ohio 44106

Phone: ( 2 1 6 ) 229-6088

F ax: (216) 2 2 9 - 6 0 9 2

[email protected]

wno ss@sco tt - sco t t. co m

- a n d -

SCOTT + SCOTT, LLP

DAVID R . SCOTT

1 08 Norwich Avenue

P.O. Box 1 92

Colchester, CT 0 6 4 1 5

Telephone: (860) 53 7 - 5 5 3 7

Facsimile: (860) 537 -4432

[email protected]

P l a i n t i f f s ' Counsel

TOTHE CLE :

P l e a s e s e r v e t h e above n a m e d Defendants a t t h e a d d r e s s e s s e t f o r t h i n t h e c a p t i o n b y c e r t i f i e d m a i l .

17



EXHIBITA



Case Docket

a

Gerald E . F ue r s t , C e r k o f CourtsCourt o f Common Fleas - C u y a h o g a County. Ohio

P r i n t e r F r i e n d l y Version

Case Number : CV-08-657360

C a s e T i t l e : LISA PARKER ETAL v s . NATIONAL CITY CORPORATION-ET AL

Imag e Vie we r : AltemaTIFF

DOCKET INFORMATION

From D a t e S o r t Typ e Typ e Typ e Typ e SearchType

Ascendi ngIJiJS t a r t S e a r c h

r D e s c e n d i n g

Page 1 of 3

DOCKET INFORMATION

Date Side Type Description Imag e

04/21/2008 P1 SR COMPLAINT WITH JURY DEMAND FILED. SERVICE REQUEST -

SUMMONS BY CERTIFIED MAIL TOTHE DEFENDANT(S).

04/21/2008 N/A SF JUDGE SHIRLEY STRICKLAND SAFFOLD ASSIGNED (RANDOM)

04/21/2008 P1 SF AD DITIONAL DEPOSITFOR SERVICE, OVER 10 DEFENDANTS $ 2 5

04/21/2008 P1 SF LEGAL RESEARCH

04/21/2008 P1 SF LEGAL NEWS

04/21/2008 P1 SF LEGAL AID

04/21/2008 P1 SF COMPUTER FEE

04/21/2008 P1 SF CLERK'S FEE04/21/2008 P1 SF DEPOSITAMOUNT PAID FINCUN-MANCINI

04/21/2008 N/A SF CASE FILED

04/22/2008 D 1 5 CS WRIT FEE

04/22/2008 D 1 4 CS WRIT FEE

04/22/2008 D 1 3 CS WRIT FEE

04/22/2008 D 1 2 CS WRIT FEE

04/22/2008 D 1 1 CS WRIT FEE

04/22/2008 D 1 0 CS WRIT FEE

04/22/2008 D 9 CS WRIT FEE

04/22/2008 D 8 CS WRIT FEE

04/22/2008 D 7 CS WRIT FEE

04/22/2008 D 6 CS WRIT FEE

04/22/2008 D 5 CS WRIT FEE

04/22/2008 D 4 CS WRIT FEE

04/22/2008 D 3 CS WRIT FEE

04/22/2008 D 2 CS WRIT FEE

04/22/2008 D 1 CS WRIT FEE

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Case D ocket Pag e 2 of 3

04/24/2008 D 5 SR SUMS COMPLAINT(11886563) SENT BY CERTIFIED MAIL. TO: JON E .

BARFIELD 1900 E NINTH STREET CLEVELAND, OH 44114-0000

04/24/2008 D 4 SR SUMS COMPLAINT(11886562) SENT BY CERTIFIED MAIL. TO:

THOMAS A . RICHLOVSKY 1900 E NINTH STREET CLEVELAND, OH I

44114-0000


JEFFREY D . KELLY 1900 E NINTH STREET CLEVELAND, OH 44114-

0000

04/24/2008 D 2 SR SUMS COMPLAINT(11886560) SENT BY CERTIFIED MAIL. TO: DAVID

A . DABERKO 1900 E NINTH STREET CLEVELAND, OH 44114-0000

04/24/2008 Dl SR SUMS COMPLAINT(11886559) SENT BY CERTIFIED MAIL. TO:

NATIONAL CITY CORPORATION 1900 E NINTH STREET CLEVELAND,

OH 44114 -0000

04/24/2008 D 1 5 SR SUMS COMPLAINT(11886573) SENT BY CERTIFIED MAIL. TO: ERNST

& YOUNG LLP 925 EUCLID AVENUE SUITE 1300 CLEVELAND, OH

44115-0000

04/24/2008 D 1 4 SR SUMS COMPLAINT(11886572) SENT BY CERTIFIED MAIL. TO: DAVID

L . ZOELLER 1900 E NINTH STREET CLEVELAND, OH 44114-0000

04/24/2008 D 1 3 SR SUMS COMPLAINT(11886571) SENT BY CERTIFIED MAIL. TO: MORRY

WEISS 1900 E NINTH STREET CLEVELAND, OH 44114-0000

04/24/2008 D 1 2 SR SUMS COMPLAINT(11886570) SENT BY CERTIFIED MAIL. TO: JERRY

SUE THORNTON 1900 E NINTH STREET CLEVELAND, OH 44114-0000

04/24/2008 D 1 1 SR SUMS COMPLAINT(11886569) SENT BY CERTIFIED MAIL. TO:

GERALD L . SHAHEEN 1900 E NINTH STREET CLEVELAND, OH 44114-

0000

04/24/2008 D 1 0 SR SUMS COMPLAINT(11886568) SENT BY CERTIFIED MAIL. TO: PAUL

A . ORMOND 1900 E NINTH STREET CLEVELAND, OH 44114-0000

04/24/2008 D 9 SR SUMS COMPLAINT(11886567) SENT BY CERTIFIED MAIL. TO: S .

CRAIG LINDNER 1900 E NINTH STREET CLEVELAND, OH 44114 -0000


BERNADINE P . HEALY 1900 E NINTH STREET CLEVELAND, OH

44114-0000


CHRISTOPHER M . CONNOR 1900 E NINTH STREET CLEVELAND, OH J

44114-0000

04/24/2008 D 6 SR SUMS COMPLAINT(11886564) SENT BY CERTIFIED MAIL. TO: JAMES

S . BROADHURST 1900 E NINTH STREET CLEVELAND, OH 44114-

0000

04/30/2008 D 6 SR CERTIFIED MAIL RECEIPT NO. 1 1 8 8 6564 RETURNED BY U . S . MAIL

DEPARTMENT 04/30/2008 BROADHURST/JAMES/S. MAIL RECEIVED

ATADDRESS 04/29/2008 SIGNED BY OTHER.

04/30/2008 D 1 5 SR CERTIFIED MAIL RECEIPT NO. 1 1 8 8 6573 RETURNED BY U . S . MAIL

DEPARTMENT 04/29/2008 ERNST & YOUNG LLP MAIL RECEIVED AT

ADDRESS 04/28/2008 SIGNED BY OTHER.

04/30/2008 D 4 SR CERTIFIED MAIL RECEIPT NO. 11886562 RETURNED BY U . S . MAIL

DEPARTMENT 04/29/2008 RICHLOVSKY/THOMAS/A. MAIL RECEIVED



DEPARTMENT 04/29/2008 HEALY/BERNADINE/P. MAIL RECEIVED AT



DEPARTMENT 04/29/2008 CONNOR/CHRISTOPHER/M. MAIL

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Case Docket

RECEIVED ATADDRESS 0 4 / 28/2008 SIGNED BY OTHER.

0 4 / 3 0 / 2 008 D 9 SR CERTIFIED MAIL RECEIPT NO. 1 1 8 8 6567 RETURNED BY U . S . MAIL

DEPARTMENT 04/29/2008 LINDNER/S./CRAIG MAIL RECEIVED AT


04/30/2008 D 1 3 SR CERTIFIED MAIL RECEIPT NO. 1 1 88 65 71 RETURNED BY U . S . MAIL

DEPARTMENT 04/29/2008 WEISS/MORRY/ MAIL RECEIVED AT


04/30/2008 D 1 4 SR CERTIFIED MAIL RECEIPT NO. 11886572 RETURNED BY U . S . MAIL

DEPARTMENT 04/29/2008 ZOELLER/DAVID/L. MAIL RECEIVED AT



DEPARTMENT 04/29/2008 THORNTON/JERRY/SUE MAIL RECEIVED



DEPARTMENT 04/29/2008 ORMOND/PAUL/A. MAIL RECEIVED AT



DEPARTMENT 04/29/2008 SHAHEEN/GERALD/L. MAIL RECEIVED AT



DEPARTMENT 04/29/2008 NATIONAL CITY CORPORATION MAIL

RECEIVED ATADDRESS 04/28/2008 SIGNED BY OTHER.


DEPARTMENT 04/29/2008 KELLY/JEFFREY/D. MAIL RECEIVED AT



DEPARTMENT 04/29/2008 DABERKO/DAVID/A. MAIL RECEIVED AT



DEPARTMENT 04/29/2008 BARFIELD/JON/E. MAIL RECEIVED AT


s

Page 3 of 3

P r i n t Page I Close Win d o w I D i s c l a i m e r s I P r i n t e r F r i e n d l y Version

Only t h e o f f i c i a l c o u r t r e c o r d s a v a i l a b l e from t h e Cu y a h o g a County C l e r k o f C o u r t s , a v a i l a b l e i n p e r s o n , should b e r e l i e d upon as accurate

and c u r r e n t .

© PROWARE 1997-2008

Fo r questions/comments please c l i c k here

I F

h t t p : / / cpdocket . cp.cuyahogacounty.us/p_CV_ Docket . aspx 5/17/2008



IN THE UNITED STATES DISTRICT COURT

FORTHENORTHERNDISTRICTOF OHIO

EASTERN DIVISION

LISA PARKERAND STEPHEN ENNS,

P l a i n t i f f s ,

CASE NO.:

JUDGE:

V .

NATIONAL CITY CORPORATION,

DAVID A. DABERKO, JEFFREY D.

KELLY,THOMAS A. RICHLOVSKY,

JON E. BARFIELD, JAMES S .

BROADHURST, CHRISTOPHER M.

CONNOR, BERNADINE P . HEALY, S .

CRAIG LINDNER, PAUL A. ORMOND,

GERALD L. SHAHEEN, JERRY SUE

THORNTON, MORRYWEISS, DAVID L.

ZOELLERAND ERNST&YOUNG LLP,

Defendants.

NOTICE OFREMOVAL

Pursuant t o 28 U.S.C. § 1446( a ) , D e f en dant s h e re b y provide n o t i c e of t h e removal of t h i s

c i v i l a c t i o n c u r r e n t l y pending i n t h e Common P l e a s Court of Cuyahoga County, Ohio , and s t a t e

a s f o l l o w s :

1 . N a t i o n a l C i t y C o r p o r a t i o n , D a v i d A. D a b e rko, J e f f r e y D. K e l l y , Th o m a s A.

Richlovsky, Jon E . B a r f i e l d , James S . B r o a d h u r s t , C h r i s t o p h e r M. Connor, Bernadine P . H e a l y ,

S . Craig L i n d n e r , Paul A. Ormo nd, Gerald L . Shaheen, J e r r y Su e Thornton, Mor ry Weiss, D a v i d

L . Z o e l l e r and E r n s t & Y o u n g LLP a r e d e f e n d a n t s i n a c i v i l a c t i o n f i l e d i n , and c u r r e n t l y pending

b e f o r e , t h e Common P l e a s Court of Cuyahoga County, Ohio, s t y l e d a s Parker , e t a l . v . National

C i t y C o r p . , e t a l . , Case No . CV - 08-657360 ( t h e " S t a t e Court Action ) .

CLI-1612381v4



2 . Th e Complaint i n t h e S t a t e Court A c t i o n , w h i c h d e m a n d e d a t r i a l b y j u r y , w a s

f i l e d with t h e Clerk of t h e Common P l e a s Court of Cuyahoga County, Ohio, on A p r i l 2 1 , 2 0 0 8 .

GROUNDS FORREMOVAL

This a c t i o n i s removable pursuant t o 28 U.S.C. § 1441( a ) and 1 5 U.S.C. § 77 p

( t h e S e c u r i t i e s L i t i g a t i o n Uniform S t a n d a r d s Ac t ("SLUSA ) ) i n t h a t i t i s an a c t i o n over w h i c h

t h e D i s t r i c t Courts of t h e United S t a t e s have o r i g i n a l j u r i s di c t i o n under 28 U.S.C. § 1331 and 1 5

U.S.C. § 7 7 v .

REMOVAL PURSUANT TO SLUSA

4 . T h i s a c t i o n i s of a wholly c i v i l n a t u r e of w h ic h t h e United S t a t e s D i s t r i c tCourt

f o r t h e Northern D i s t r i c t of Ohio, E a s t e r n D i v i s i o n , h a s o r i g i n a l j u r i s d i c t i o n under 28 U.S.C.

§ 1 3 3 1 , and i s one t h a t may be r e m o v e d pursuant t o 28 U.S.C. § 1 4 4 1 ( a ) and SLUSA.

This Court h a s f e d e r a l q u e s t i o n j u r i s d i c t i o n over t h e a c t i o n because a l l c l a i m s f o r

r e l i e f i n p l a i n t i f f s ' Complaint a l l e g e v i o l a t i o n s of t h e S e c u r i t i e s Ac t of 1 9 3 3 . Complaint ¶ 1 .

(The Complaint i s p a r t of E x h i b i t A a t t a c h e d h e r e t o . ) As s u c h , and a s pleaded i n t h e Complaint,

only q u e s t i o n s of f e d e r a l la w a r e a t i s s u e i n t h i s m a t t e r . No s t a t e s t a t u t e s o r r e g u l a t i o n s a r e

i m p l i c a t e d i n t h e Complaint.

6 . Th e a c t i o n i s t h e r e f o r e one of w h ic h t h e United S t a t e s D i s t r i c t Court f o r t h e

Northern D i s t r i c t of Ohio , E a s t e r n D i v i s i o n , has o r i g i n a l f e d e r a l q u e s t i o n j u r i s d i c t i o n under 28

U.S.C. § 1331 and 1 4 4 1 ( b ) , and t h i s a c t i o n may b e r e m o v e d t o t h i s Court b y d e f e n d a n t s pursuant

t o 28 U S . C . § 1441 ( a ) and ( b ) and 1 5 U. S . C . § 7 7 p .

7 . T h i s Notice i s being f i l e d pursuant t o 28 U.S.C. § 1446(b) w i t h i n t h i r t y ( 3 0 ) days

of s e r v i c e of t h e i n i t i a l pleading i n w h i c h a removable claim i s a s s e r t e d , and i s removable i n t h a t :

( a ) Th e time f o r f i l i n g t hi s Notice u nd er 2 8 U.S.C. § 1446 h a s n o t e x p i r e d .

CLI-1612381v4 2



( b ) S e c t i o n 22 of t h e S e c u r i t i e s Ac t o f 1 93 3 ( t h e "1933 Act ) ( 1 5 U.S.C.

§ 77v) e x p l i c i t l y p r o v i d e s t h a t t h e D i s t r i c t Courts of t h e United S t a t e s s h a l l have j u r i s d i c t i o n

c o n c u r r e n t with S t a t e and T e r r i t o r i a l c o u r t s over m a t t e r s a r i s i n g under t h e A c t .

( c ) S e c t i o n 22 a l s o p r o v i d e s t h a t , " [ e ] x c e p t a s provided i n s e c t i o n 1 6 ( c ) , no

c a s e a r i s i n g under t h i s t i t l e and brought i n any S t a t e c o u r t of competent j u r i s d i c t i o n s h a l l be

r e m o v e d t o any c o u r t i n t h e United S t a t e s . S e c t i o n 16 ( c ) of t h e 1933 Ac t ( 1 5 U.S.C. § 7 7 p ( c ) )

p r o v i d e s : "Any covered c l a s s a c t i o n brought i n any S t a t e c o u r t i n v o l v i n g a covered s e c u r i t y , a s

s e t f o r t h i n s u b s e c t i o n ( b ) , s h a l l be removable t o t h e F e d e r a l d i s t r i c t c o u r t f o r t h e d i s t r i c t i n w h ic h

t h e a c t i o n i s p e n d i n g , and s h a l lbe

s u b j e c t t o s u b s e c t i o n ( b ) .

( d ) A "covered c l a s s a c t i o n i s d e f i n e d i n 1 5 U.S.C. § 77p( f ) ( 2 ) a s any s i n g l e

l a w s u i t i n which:

( i ) d a ma ges a r e sought on behalf of m o r e t h a n 50 persons o r

p r o s p e c t i v e c l a s s m e m b e r s, and q u e s t i o n s o f la w o r f a c t common t o t h o s e persons o r m e m b e r s

predominate over any q u e s t i o n s a f f e c t i n g only i n d i v i d u a l persons o r m e m b e r s, o r

( i i ) one o r m o r e n a m e d p a r t i e s s e e k s t o r e c o v e r d a ma ges on a

r e p r e s e n t a t i v e b a s i s on behalf of themselves and o t h e r u n n a m e d p a r t i e s s i m i l a r l y s i t u a t e d , and

q u e s t i o n s of la w o r f a c t common t o t h o s e persons o r m e m b e r s of t h e p r o s p e c t i v e c l a s s

predominate over any q u e s t i o n s a f f e c t i n g only i n d i v i d u a l persons o r members.

( e ) Th e a l l e g a t i o n s of t h e Complaint c l e a r l y admit t h a t t h i s i s a covered c l a s s

a c t i o n p e r t h i s d e f i n i t i o n . Se e Complaint 1 1 2 7 - 3 2 . Paragraph 28 of t h e Complaint e x p r e s s l y

a l l e g e s t h a t " P l a i n t i f f s b e l i e v e s [ s i c ] t h a t t h e r e a r e thousands of m e m b e r s i n t h e proposed c l a s s .

CLI-1612381v4



( f ) T h i s a c t i o n i n v o l v e s a "covered s e c u r i t y , a s d e f i n e d i n 1 5 U.S.C.

§ 7 7 p ( f ) ( 3 ) and 1 5 U.S.C. § 7 7 r ( b ) , i n t h a t s t o c k of N a t i o n a l C i t y Corporation w as a t a l l r e l e v a n t

t i m e s l i s t e d on t h e New York Stock Exchange.

( g ) Although t h e Complaint a l l e g e s t h a t t h i s c a s e i s n o t removable, t h a t

a l l e g a t i o n i s i n c o r r e c t . Every c o u r t i n t h e S i x t h C i r c u i t t o c o n s i d e r t h e r e m o v a b i l i t y of c l a i m s

such a s t h e ones a s s e r t e d h e r e has upheld t h e i r removal. Se e I n r e K i n g Pharmaceuticals, I n c . ,

230 F.R.D. 503 ( E . D . Tenn. 2004) (denying motion t o r e m a n d a 1933 Ac t c a s e a f t e r d e f e n d a n t s

r e m o v e d i t under SLUSA); K u l i n s k i v . American E l e c t r i c Po w e r C o . , No . C-2-03-412, 2003 U . S .

D i s t .LEXIS

26447 ( S . D . Ohio S e p t . 1 9 , 2003 ) ( s a m e ) . Se e a l s o Rubin v . P i x e l p l u s C o . ,No .

0 6 -

CV-2964, 2007 WL 778485 (E.D.N.Y. Mar. 1 3 , 2007) ( denying motion t o r e m a n d a 1933 Ac t

c a s e a f t e r d e f e n d a n t s r e m o v e d i t under SLUSA); Brody v . Homestore, I n c . , 2 40 F . Supp. 2 d 1122

( C . D . C a l . 2003 ) ( s a m e ) . Co pi es o f a l l unreported c a s e s a r e a t t a c h e d h e r e t o a s E x h i b i t B .

COMPLIANCE WITHREMOVAL PROCEDURES

8 . A l l d e f e n d a n t s j o i n i n t h i s No t ic e o f Removal.

9 . This No t ic e o f Re moval i s p r o p e r l y f i l e d i n t h e United S t a t e s D i s t r i c t Court f o r

t h e Northern D i s t r i c t of Ohio, E a s t e r n D i v i s i o n , because t h e Common P l e a s Court of Cuyahoga

County , Ohio i s l o c a t e d i n t h i s f e d e r a l j u di c i a l d i s t r i c t and d i v i s i o n .

1 0 . Moreover, p l a i n t i f f s admit i n 1 1 35 - 3 8 and 40 -42 o f t h e Complaint t h a t t h e c l a i m s

p r o f f e r e d t h e r e i n a r e s i m i l a r t o and a r i s e o u t of s i m i l a r a l l e g e d f a c t u a l circumstances a s a t l e a s t

eleven o t h e r c a s e s pending i n t h e United S t a t e s D i s t r i c t Court f o r t h e Northern D i s t r i c t of Ohio,

w h i c h have been c o n s o l i d a t e d f o r p r e t r i a l purposes b e f o r e Th e Honorable P a t r i c i a A. Gaughan.

Se e A p r i l 8 , 2008 Order i n Casey v . National C i t y C o r p . , e t a l . , Case No . 08-cv-209 ( N . D . Ohio)

CLI-1612381v4 4



( c r e a t i n g I n r e National C i t y C o r p . S e c u r i t i e s , D e r i v a t i v e & ERISA L i t i g a t i o n , Ca se No. 0 8 -

7 0 0 0 ) .

1 1 . Co pi es o f t h e docket and a l l p r o c e s s , p l e a d i n g s and o r d e r s r e c e i v e d b y d e f e n d a n t s

i n t h e S t a t e Court Action t o d a t e a r e a t t a c h e d h e r e t o a s E x h i b i t A.

1 2 . Pursuant t o 28 U.S.C. § § 1446(d) and 1 4 5 3 ( b ) , a copy of t h i s Notice of Re moval

i s being f i l e d with t h e Common P l e a s Court of Cuyahoga County, Ohio, i n Case No. CV-08-

657360. A copy of t h e No t ice o f F i l i n g No t ic e o f Re moval t h a t w i l l be f i l e d with t h e Clerk of

t h e Common P l e a s Court of Cuyahoga County, Ohio i s a t t a c h e d a s E x h i b i t C .

1 3 . Written n o t i c e of t h e f i l i n g of t h i s No t ice o f Re moval i s being served on

P l a i n t i f f s ' c o u n s e l on t h i s d a t e .

1 4 . I n f i l i n g t h i s No ti ce o f Removal, none of t h e d e f e n d a n t s , i n d i v i du a l l y o r

c o l l e c t i v e l y , waives any d e f e n s e t h a t m i g h t be a v a i l a b l e t o any of t h e m i n t h i s a c t i o n .

WHEREFORE, f o r t h e f o r e g o i n g r e a s o n s , d e f e n d a n t s r e s p e c t f u l l y r e q u e s t t h a t t h i s

Court e x e r c i s e j u r i s d i c t i o n over t h i s r e m o v e d a c t i o n and e n t e r o r d e r s and g r a n t r e l i e f a s may be

necessary t o s e c u r e removal and t o p r e v e n t f u r t h e r proceedings i n t h e Common P l e a s Court of

Cuyahoga County, Ohio, and a wa r d t o d e f e n d a n t s a l l o t h e r r e l i e f t o w h ic h t h e y a r e j u s t l y

e n t i t l e d .

CLI-1612381v4 5



D a t e d : May 2 0 , 2008

OfCounsel:

S t a n l e y J . Parzen

MAYERBROWNLLP

7 1 S . Wacker Dr i ve

Chicago, IL 60606

Telephone: ( 3 1 2 ) 701-7326

F a c s i m i l e : ( 3 1 2 ) 706-8668

E m a i l : s pa r z en@ mayer b r o wn.c o m

R e s p e c t f u l l y s u b m i t t e d ,

s / John M. N e w m a n , J r .

John M. N e w m a n , J r . (0005763)

Geoffrey J . R i f f s (0062603)Adrienne M. F e r r a r o (0076332)

JONES DAY

North P o i n t

901 Lakesi d e Avenu e

C l e v e l a n d , OH 44114-1190

Telephone: ( 2 1 6 ) 586-3939

F a c s i m i l e : ( 2 1 6 ) 579-0212

E - m a i l : j [email protected] m

E - m a i l : [email protected]


A t t o r n e y s f or Defendants National C i t y

C o r p o r a t i o n , D a v i d A . D a be rko , J e f f r e y D.

K e l l y , Thoma s A . R i c h l o v s k y , Jon E B a r f i e l d ,

Ja me s S . Broadhurst, Christopher M. Connor,

Bernadine P . Healy , S . Craig L i n d n e r , Paul

A . Ormond Gerald L . Shaheen , J e r r y Su e

T h o r n t o n , M o r r y Weiss a nd D a v i d L . Z o e l l e r

s / F i d e l i s I . A g b a p u r u o n w u

F i d e l i s I . A g b a p u r u o n w u (0075409)MAYERBROWNLLP

1909 KS t r e e t , N.W.

Washington, DC 20006-1101

Telephone: ( 2 0 2 ) 263-3000

F a c s i m i l e : ( 2 0 2 ) 263-3300

E m a i l : fagbapuruonwuc^r^,mayerbrown.com

Attorney f or Defendant Ernst & Young LLP

CLI-1612381v4 6



CERTIFICATE OF SERVICE

A copy of t h e f o r e g o i n g No t ic e o f Re moval h a s been s e n t v i a r e g u l a r U . S . mail , postage

p r e p a i d , t h i s 20th day of May, 2008, t o t h e f o l l o w i n g :

Geoffrey M. Johnson

Walter W. Noss

SCOTT + SCOTT, LLP

1 2 43 4 Ce da r Road, S u i t e 1 2

Cleveland H e i g h t s , Oh i o 4 41 0 6

Telephone: ( 2 1 6 ) 229-6088

F a c s i m i l e : ( 2 1 6 ) 229-6092

E - m a i l : gjohnson@s c o t t - s c o t t . c o m

E - m a i l : wno ss@s c o t t - s c o t t . c o m

D a v i d R . S c o t tSCOTT + SCOTT, LLP

108 No r w ic h Avenu e

P . O . Box 192

C o l c h e s t e r , CT 06415

Telephone: ( 8 6 0 ) 537-5537

F a c s i m i l e : ( 8 6 0 ) 537-4432

E - m a i l : d r s c o t t @ s c o t t - s c o t t . c o m

A t t o r n e y s f or P l a i n t i f f s

s / Adrienne M. F e r r a r oAdrienne M. F e r r a r o (0076332)

JONES DAY

North P o i n t

901 Lakesi d e Avenu e

C l e v e l a n d , OH 44114-1190

Telephone: ( 2 1 6 ) 586-3939

F a c s i m i l e : ( 2 1 6 ) 579-0212


One of t h e a t t o r n e y s f or Defendants

National C i t y C o r p o r a t i o n , D a v i d A .D a be rko , J e f f r e y D. K e l l y , Thoma s A .

Richlovsky , Jon E B a r f i e l d , James S .

Broadhurst , Christopher M. Connor,

Bernadine P . Healy , S . Craig L i n d n e r , Paul

A . Or m o nd , G er a ld L . Shaheen, J e r r y Su e

Thornton , M o r r y Weiss a nd D a v i d L . Z o e l l e r

national city securities fraud case

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