American Express Sued Over Junk Bonds

American Express Co. was accused in a lawsuit of deceiving shareholders about junk bond investments that lowered the company’s pretax profit by more than $1 billion in the first half of 2001.

The class-action suit was filed on behalf of investors who acquired the stock between July 18, 1999, and July 17, 2001, according to a statement from the plaintiffs’ law firm, Lovell & Stewart in New York.

An American Express spokesman said the firm had not seen the suit and could not comment.

Shares of American Express, which rose to $63 in October 2000, fell as low as $37.17 on July 18, 2001, the day the firm announced it lost $826 million, before taxes, as junk bond default rates soared. Earlier in the year, the travel and credit card company said it had written off $182 million on the investments.