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Case ID: 3686 | Stocks | 09/30/2004
A class action has been filed against the online movie rental service Netflix, Inc. and certain of its officers and directors by stockholders who purchased the company’s common stock between October 1, 2003 and July 15, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
The complaint alleges that Netflix violated the federal Securities Exchange Act by deliberately understating the Company’s “churn” rate (the percentage of its subscribers that cancelled per month) by utilizing a novel definition of “churn” that artificially decreased the Company’s reported churn rate during quarters when the Company was adding large numbers of new subscribers. Netflix is further accused of misrepresenting subscriber growth to the SEC by reporting numbers of new subscribers without any direct disclosure or the large percentage of subscriber cancellations during the same time period. On July 15, 2004, after the close of trading, Netflix finally disclosed that while it had added 537,000 new subscribers during the second quarter of 2003, it had lost 422,000 other subscribers in that time period and that although the company added 1,343,000 new subscribers during the first half of 2004, in the same period it had suffered 737,000 cancellations. In response to this news, Netflix shares plummeted 38% in just two days. The lawsuit seeks to recover damages for the lost value of Netflix stock on behalf of class members. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against Dura Pharmaceuticals, Inc. (formerly Nasdaq: DURA) and certain of its officers and directors by stockholders who purchased the company's common stock between April 15, 1997, and February 24, 1998. A lawsuit has been filed in the United States District Court for the Eastern District of Michigan, on behalf of persons who purchased or otherwise acquired publicly traded securities of Visteon Corp. ("Visteon" or the "Company") (NYS: VC.N) between January 23, 2004 and January 31, 2005, inclusive, (the "Class Period"). The lawsuit was filed against Visteon, Peter Pestillo, Michael Johnston, Glenda J. Minor, Daniel R. Coulson and James Palmer ("Defendants"). Several class actions have been filed against liability insurer American Physicians Capital, Inc. (Nasdaq:ACAP) and certain of its officers and directors by stockholders who purchased the company's common stock between February 13, 2003, and November 6, 2003. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The parties have reached a $20 million settlement in an administrative proceeding filed by the SEC against subsidiaries of Conseco, Inc. (CIHC, Inc., Conseco Services, LLC, and Conseco Equity Sales, Inc.), and the company to which Conseco sold its variable annuity business in 2002, Inviva, Inc., and its subsidiary Jefferson National Life Insurance Company. The action alleged that the insurance companies facilitated market timing of mutual funds through the sale of variable annuities, harming investors who purchased variable annuity products from the companies. Persons eligible to take part in the settlement should contact the attorneys who prosecuted the case for more information. A class action has been filed against Isolagen, Inc. (ILE), certain of its officers and directors by stockholders who purchased the company's common stock between March 3, 2004 and August 1, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. A class action has been filed against China Energy Savings Technology Inc. (CESV), certain of its officers and directors by stockholders who purchased the company's common stock between April 21, 2005 and February 15, 2006. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. |
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