Class Calls Use of ‘Asset Locators’ a Fraud

CLEVELAND (CN) - FirstEnergy Corp. defrauds inheritors by making them pay an "asset locator" to recover stock they already own, a class action claims in state court.

Lead plaintiff Ronald Bell claims FirstEnergy defrauded Eleanor Rickett's estate by forcing it to buy back stock she already owned. Bell sued individually, as the executor of the estate, and on behalf of the class, in Cuyahoga County Court of Common Pleas.

Bell claims FirstEnergy breached its fiduciary duties to its stockholders by "treating their stock as unclaimed when it was not; by failing to update stockholders' address information; and by allowing third party 'asset locator services' access to private account information and/or selling them such information."

When Rickett died in 2007 her FirstEnergy Corp. stock was not unclaimed, and "First Energy had no right to enter an agreement, or facilitate an agreement, which resulted in plaintiff being charged for information about the existence or location of the stock," Bell says in the complaint.

"Despite this, and without the knowledge of Rickett during her life, or her executor after her death, First Energy released personal and private information to a third party, about Rickett's stock ownership in First Energy.

"At the time when this occurred, if First Energy intended to treat Rickett as a lost asset holder or otherwise dormant and in need of locating, it had a duty to Rickett and after her death to her estate to do so in a way which did not prejudice her interests.

"Instead, and with the knowledge and participation of First Energy, a third party contacted Rickett's estate and falsely advised them that Rickett had an 'unclaimed' asset which it would disclose - if the estate paid them 35 percent of the asset's value (here, $4,889.59) which the estate did pay, to its damage.

"Upon information and belief, First Energy released confidential, personal financial information about Rickett to the third party; in violation of First Energy's duty to its stockholders, contrary to Ohio's Unclaimed Funds law, and/or in violation of Ohio privacy laws."

Bell says he was contacted by the asset locator shortly after Rickett's death, and was "informed that the locator had identified an 'unclaimed asset' and offered to facilitate the 'recovery' of that asset," and was eventually told that the company "would withhold the information about the location of the asset unless plaintiff paid a fee of 35 percent."

Bell claims that at least 40 stockholders of FirstEnergy Corp. have had similar experiences. He seeks compensatory and punitive damages for unjust enrichment, breach of fiduciary duty and fraud.

He is represented by Patrick Perotti with Dworken and Bernstein, in Painesville, Ohio.

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