(Reuters) – A federal judge refused on Thursday to throw out a lawsuit accusing General Electric Co and its chief executive of misleading investors about the conglomerate’s financial health and exposure to risky debt during the 2008 financial crisis.
The decision by District Judge Richard Holwell in Manhattan keeps alive litigation seeking to hold the company responsible for investor losses during a six-month period when its stock price fell to about $10 from about $26, causing its market value to tumble by more than $150 billion.
Investors claimed that GE withheld information regarding its health and the health of its GE Capital finance arm, including exposures to subprime and other low-quality loans. They also said GE misleadingly touted itself as being safer than rivals, despite the effects of the financial crisis.
Holwell also let stand some claims accusing bank underwriters of omitting statements from offering documents for a $12.2 billion GE stock offering in October 2008. He dismissed several other claims, and did not rule on the case’s merits.
A GE spokesman and lawyers for the investors did not immediately respond to requests for comment. Antonio Yanez, a lawyer for the banks, declined to comment.
Holwell said investors led by the State Universities Retirement System of Illinois adequately alleged that GE made material misrepresentations during the crisis about its access to commercial paper and ability to maintain its dividend.
He also let the investors pursue claims alleging that company officers, including Chief Executive Jeffrey Immelt and Chief Financial Officer Keith Sherin, misled them and had sufficient intent, known as “scienter,” to mislead.
CATEGORICAL STATEMENTS
“Immelt’s categorical statements that investors could ‘count on’ a dividend and that GE was having ‘no difficulties’ issuing commercial paper are not the sort of cautious statements one would expect of a CEO attempting to come to grips with the effects of the economic crisis on his company,” Holwell wrote in a 53-page decision.
“A CEO is allowed to convince the public to invest in his company, but not at the expense of providing it with accurate information about the company’s financial health,” Holwell continued. “Taking the factual allegations in the (complaint) as true, the inference that Immelt acted with scienter is at least as compelling as the inference that he did not.”
Among the banks that were sued were Bank of America Corp, Citigroup Inc, Deutsche Bank AG Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley, court records show.
The lawsuit covered investors who owned GE stock from September 25, 2008 to March 19, 2009.
During that period the Fairfield, Connecticut-based company cut its dividend and lost its “triple-A” credit rating. It also received a $3 billion infusion from Warren Buffett’s Berkshire Hathaway Inc.
GE’s many products include jet engines, turbines and light bulbs. It also owns part of NBC Universal, in which Comcast Corp holds a majority stake.
The case is In re: General Electric Co Securities Litigation, U.S. District Court, Southern District of New York, No. 09-01951.
(Reporting by Jonathan Stempel in New York; editing by Andre Grenon, Phil Berlowitz)
2012年1月13日星期五
2012年1月2日星期一
Tech ticker: Investor sues Affymetrix over financing of acquisition
Affymetrix
Investor sues over financing of acquisition
Affymetrix is being sued for fraud by investment firm Tang Capital Partners, which claims the Santa Clara maker of genomic analysis tools misrepresented the financing of an acquisition for which it depleted cash meant to repurchase $95 million in notes bought by Tang and other investors.
Tang Capital, which purchased $78 million of Affymetrix’s 3.5 percent senior notes from 2008 to 2011, alleged in a complaint filed Thursday in Santa Clara County Superior Court in San Jose that the repurchase money is being used as collateral to finance Affymetrix’s acquisition of eBioscience.
The $330 million cash deal was announced Nov. 30. The merger triggers a repurchase provision in the note contract that Affymetrix has refused to honor, Tang said in the complaint.
Affymetrix said in a regulatory filing Thursday that it believes the suit is “without merit.”
– Bloomberg News
Nasdaq
Judge OKs delisting of cleantech company
The Nasdaq Stock Market won a federal judge’s permission to delist a Chinese maker of wind towers that claims the procedures for kicking it out are marred by bias.
U.S. District Judge Richard Sullivan on Friday lifted the restraining order imposed against Nasdaq by New York State Supreme Court Justice
Melvin Schweitzer on Dec. 20. Sullivan also denied a request by CleanTech Innovations, based in Tieling, China, that he impose his own temporary restraining order.
“The court finds that the state court lacked jurisdiction to enter a temporary restraining order in a matter arising under” the federal securities law, Sullivan wrote in his order.
CleanTech has been fighting removal since January, when Nasdaq asserted that the company, which makes towers for wind turbines, intentionally withheld material information about $20 million in financing during its listing application. The company says it provided all necessary information in a timely manner.
– Bloomberg News
http://tourism9.com/
Investor sues over financing of acquisition
Affymetrix is being sued for fraud by investment firm Tang Capital Partners, which claims the Santa Clara maker of genomic analysis tools misrepresented the financing of an acquisition for which it depleted cash meant to repurchase $95 million in notes bought by Tang and other investors.
Tang Capital, which purchased $78 million of Affymetrix’s 3.5 percent senior notes from 2008 to 2011, alleged in a complaint filed Thursday in Santa Clara County Superior Court in San Jose that the repurchase money is being used as collateral to finance Affymetrix’s acquisition of eBioscience.
The $330 million cash deal was announced Nov. 30. The merger triggers a repurchase provision in the note contract that Affymetrix has refused to honor, Tang said in the complaint.
Affymetrix said in a regulatory filing Thursday that it believes the suit is “without merit.”
– Bloomberg News
Nasdaq
Judge OKs delisting of cleantech company
The Nasdaq Stock Market won a federal judge’s permission to delist a Chinese maker of wind towers that claims the procedures for kicking it out are marred by bias.
U.S. District Judge Richard Sullivan on Friday lifted the restraining order imposed against Nasdaq by New York State Supreme Court Justice
Melvin Schweitzer on Dec. 20. Sullivan also denied a request by CleanTech Innovations, based in Tieling, China, that he impose his own temporary restraining order.
“The court finds that the state court lacked jurisdiction to enter a temporary restraining order in a matter arising under” the federal securities law, Sullivan wrote in his order.
CleanTech has been fighting removal since January, when Nasdaq asserted that the company, which makes towers for wind turbines, intentionally withheld material information about $20 million in financing during its listing application. The company says it provided all necessary information in a timely manner.
– Bloomberg News
http://tourism9.com/
News In Brief Tech ticker Biz buzz
Affymetrix
Investor sues over financing of acquisition
Affymetrix is being sued for fraud by investment firm Tang Capital Partners, which claims the Santa Clara maker of genomic analysis tools misrepresented the financing of an acquisition for which it depleted cash meant to repurchase $95 million in notes bought by Tang and other investors.
Tang Capital, which purchased $78 million of Affymetrix’s 3.5 percent senior notes from 2008 to 2011, alleged in a complaint filed Thursday in Santa Clara County Superior Court in San Jose that the repurchase money is being used as collateral to finance Affymetrix’s acquisition of eBioscience.
The $330 million cash deal was announced Nov. 30. The merger triggers a repurchase provision in the note contract that Affymetrix has refused to honor, Tang said in the complaint.
Affymetrix said in a regulatory filing Thursday that it believes the suit is “without merit.”
– Bloomberg News
Nasdaq
Judge OKs delisting of cleantech company
The Nasdaq Stock Market won a federal judge’s permission to delist a Chinese maker of wind towers that claims the procedures for kicking it out are marred by bias.
U.S. District Judge Richard Sullivan on Friday lifted the restraining order imposed against Nasdaq by New York State Supreme Court Justice
Melvin Schweitzer on Dec. 20. Sullivan also denied a request by CleanTech Innovations, based in Tieling, China, that he impose his own temporary restraining order.
“The court finds that the state court lacked jurisdiction to enter a temporary restraining order in a matter arising under” the federal securities law, Sullivan wrote in his order.
CleanTech has been fighting removal since January, when Nasdaq asserted that the company, which makes towers for wind turbines, intentionally withheld material information about $20 million in financing during its listing application. The company says it provided all necessary information in a timely manner.
– Bloomberg News
http://tourism9.com/
Investor sues over financing of acquisition
Affymetrix is being sued for fraud by investment firm Tang Capital Partners, which claims the Santa Clara maker of genomic analysis tools misrepresented the financing of an acquisition for which it depleted cash meant to repurchase $95 million in notes bought by Tang and other investors.
Tang Capital, which purchased $78 million of Affymetrix’s 3.5 percent senior notes from 2008 to 2011, alleged in a complaint filed Thursday in Santa Clara County Superior Court in San Jose that the repurchase money is being used as collateral to finance Affymetrix’s acquisition of eBioscience.
The $330 million cash deal was announced Nov. 30. The merger triggers a repurchase provision in the note contract that Affymetrix has refused to honor, Tang said in the complaint.
Affymetrix said in a regulatory filing Thursday that it believes the suit is “without merit.”
– Bloomberg News
Nasdaq
Judge OKs delisting of cleantech company
The Nasdaq Stock Market won a federal judge’s permission to delist a Chinese maker of wind towers that claims the procedures for kicking it out are marred by bias.
U.S. District Judge Richard Sullivan on Friday lifted the restraining order imposed against Nasdaq by New York State Supreme Court Justice
Melvin Schweitzer on Dec. 20. Sullivan also denied a request by CleanTech Innovations, based in Tieling, China, that he impose his own temporary restraining order.
“The court finds that the state court lacked jurisdiction to enter a temporary restraining order in a matter arising under” the federal securities law, Sullivan wrote in his order.
CleanTech has been fighting removal since January, when Nasdaq asserted that the company, which makes towers for wind turbines, intentionally withheld material information about $20 million in financing during its listing application. The company says it provided all necessary information in a timely manner.
– Bloomberg News
http://tourism9.com/
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