Manulife Financial Corporation faces a pending lawsuit in the US on behalf of investors, who purchased Manulife Financial Corporation common stock on the NYSE between March 28, 2008 and June 22, 2009, over alleged violations of the federal securities laws by Manulife Financial. Meanwhile an investigation on behalf of current long term investors of common stock of Manulife Financial Corp (NYSE:MFC), including those who purchased MFC share on the NYSE prior to January 2008 and continue to hold those shares, was announced.

Manulife Financial Corporation, located in Toronto, Canada, is a life insurance company and the holding company of The Manufacturers Life Insurance Company. According to the complaint filed in the United States District Court for the Southern District of New York the plaintiff alleges that Manulife Financial and certain of Manulifes executive officers violated the federal securities laws by making false and misleading statements and/or failed to disclose material adverse information concerning the true risk to the company' of its guaranteed investment products. On June 19, 2009, after the market closed, Manulife Financial announced that it received an enforcement notice from the Ontario Securities Commission relating to Manulifes disclosure of risks concerning its variable annuity guarantee and segregated funds business.

The Ontario Securities Commission notice indicated that the preliminary conclusion of Ontario Securities Commission staff was that Manulife Financial failed to meet its continuous disclosure obligations related to its exposure to market price risk in its segregated funds and variable annuity guaranteed products. The plaintiff alleges that contrary to the Company's own risk management strategy, Manulife applied no material hedging strategy to manage risk particularly during an economic downturn. The complaint further alleges that notwithstanding its risk management strategy Manulife built up a massive stock portfolio, which it chose to leave unhedged and that the defendants 'were aware or deliberately disregarded that the false and misleading statements were being issued regarding the company, and approved or ratified these statements in violation of the [U.S.] federal securities laws.' This resulted in a huge decline in the funds available to guaranty the Separate Fund Contract obligations, forcing the Company to raise billions in capital to make up for a widening shortfall in the amount it had promised to pay customers decades from now, so the lawsuit. Stunned investors responded to the Ontario Securities Commission's announcement when trading markets reopened on June 22, 2009, so the lawsuit. Manulife Financials shares dropped 12% to close at $17.67 on an unusually high trading volume of almost 8 million shares.

Spokesman for Manulife David Patterson did not comment on the specific allegations in the lawsuit, but reportedly said that 'Manulife re-iterates its clear and confident position that we have satisfied all relevant disclosure requirements' and that Manulife stands solidly behind its policy holders and holders and wealth products, and will defend its 'reputation for integrity, reliability and trustworthiness.' Shares of Manulife Financial (NYSE:MFC) closed on June 19, 2009 before the announcement at $20.57 per share and dropped to under $17 per share the following day. Shares of Manulife Financial recently traded at $19.22 per share, down from its 52weekHigh of $24.97 per share, $39.55 per share in 2008, and $46.00 per share in 2007.