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Case ID: 4385 | Stocks | 08/09/2005
A class action has been filed against International Business Machines Corporation (IBM) (NYSE:IBM), certain of its officers and directors by stockholders who purchased the company's common stock between April 05, 2005 and April 15, 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.
According to a press release dated July 8, 2005, the complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that Defendants failed to disclose that at the time of its analyst conference call on April 5, 2005, which was purportedly to discuss the impact of expensing options under SFAS 123R, (1) the Company was experiencing significant operational issues in multiple areas of its business. In particular, the Company had been unable to close significant transactions late in the first quarter, it was experiencing elongated sales cycles, and was having product-transition problems in its hardware segment. (2) The Company intentionally accelerated the adoption of SFAS 123R, despite having an additional two quarters to implement it, in order to sufficiently lower analyst expectations so that when it later disclosed the operational issues and reported earnings from continuing operations of $0.85 per share for the first quarter 2005, it would have the effect of cushioning the blow of the significant earnings miss. (3) The Company intentionally misrepresented the impact from expensing options, indicating an earnings impact of $0.14 per share on April 5, 2005 (versus the actual impact of $0.10 per share reported on April 14, 2005), in order to disguise a significant and material operating miss. The complainy further alleges that on April 14, 2005, IBM reported first quarter 2005 financial results. The Company posted net income of $1.4 billion, or $0.84 per share, which represented an additional miss of $0.06 per share, undisclosed nine days earlier. The Company also revealed that the miss was significantly attributable to operations, rather than wholly attributable to SFAS 123R, as the Company had previously indicated. Shares reacted negatively to the news, falling from $83.64 per share on April 14, 2005, to $76.70 per share on April 15, 2005. Before the markets opened on evening, April 18, 2005, the Wall Street Journal published an article characterizing IBM's April 5, 2005 announcement as "clouding" IBM's true financial position, and "cushioning the blow" of its earnings miss. On May 4, 2005, IBM announced that it would be reducing its workforce by 10,000 to 13,000 employees. On June 27, 2005, the Company announced that the SEC had begun an informal investigation into the Company's statements regarding the earnings miss. If you bought International Business Machines Corporation (IBM) securities between April 05, 2005 and April 15, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney. 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 clothing manufacturer Tropical Sportswear International Corporation (Nasdaq: TSIC) and certain of its officers and directors by stockholders who purchased the company's common stock between April 17, 2002, and January 20, 2003. The stockholders seek to recover compensatory damages for the loss of value of their stock.
A class action has been filed against commercial banking and wealth management firm Gold Banc Corporation (Nasdaq:GLDB) and certain of its officers and directors by stockholders who owned the company's common stock as of February 25, 2004, the time of the company's acquisition agreement by Silver Acquisition Corporation. The actions claim that the defendants violated their fiduciary duties by permitting directors who had substantial restricted holdings to cash out their shares too early, and accepting a sale price that did not provide an adequate premium to public shareholders. A class action has been filed against packaging materials manufacturer Sealed Air Corporation (NYSE: SEE) and certain of its officers and directors by stockholders who purchased the company's common stock between March 27, 2000, and July 30, 2002. 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. According to a law firm press release, a class action lawsuit was filed on May 30, 2008 against Tomo Therapy, Inc.
The complaint charges TomoTherapy and certain of its officers and directors with violations of the Securities Exchange Act of 1934. TomoTherapy develops, markets, and sells the Hi-Art system, a radiation therapy system for the treatment of various types of cancers.
A class action has been filed against Star Gas, LP (NYSE: SGU) and certain of its officers and directors by stockholders who purchased the company’s common stock between December 4, 2003 and October 18, 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. A class action has been filed against Federated Investors, Inc. (NYSE: FII) and certain of its affiliated companies by investors who purchased shares in any of Federated's mutual funds between November 1, 1998 and October 21, 2003. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period. |
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