There have been numerous class action lawsuits having to do with securities and investment frauds. A fair number of those reached a rather high-profile status, which has spanned over the years. Most of them were settled resulting in the defendant paying the plaintiff a hefty sum either all at once or over extended periods of time (some of which have still been paying and it’s been over 20 years for them). Let’s take a brief look at some of those high-profile fraud cases, I bet you’ll even recognize some of them.
AOL Time Warner
This was a pretty standard case; investors in AOL had sued the company claiming that AOL had allegedly improperly documented the existence of transactions having to do with advertisements from the period of 1998-2002. The investors had claimed that these false documentations inflated the company’s worth by $1.7 billion. Inflating the company by such a grand amount ended up costing those investors a lot of money. In the end, AOL had to pay out $2.5 billion.
This was actually a series of class-action lawsuits against Tyco and all individuals who ever were directors of the company. Those who were suing the directors claimed that they and the company as a whole had made numerous false and misleading statements to the public about the company’s finances. They were leading the public on to give them more incentive to invest in their company, under false pretenses. This is a huge violation; Tyco wound up paying $3.2 billion for the settlement.
This lawsuit was actually related to the Exxon Mobil Valdez oil spill that had affected thousands of victims and over 1300 miles on the coastline; that’s quite the spill, for any company. Exxon Mobil was forced to pay for the damage costs; these were residential, commercial, and industrial (different plants and refineries were damaged). The spill reached all the way to Alaska, where Exxon too was forced to pay damage costs. The total came out to $5 billion, but was later lowered to $500,000 overall.
This lawsuit represented the investors that had held stock in World Com from 1999 to 2002. It was more specifically aimed at employees of the company: CEO-Bernard Ebbers, CFO-Scott Sullivan, Controller-David Myers, and Accounting Director-Buford Yates. Basically, they were being charged with fraud for improperly classifying their expenses. After it was all said and done they ended up paying $6.2 billion in the settlement.
These were just a few examples of what extremely powerful people and entities are capable of doing. You’ll also notice that some of these dated back into the 90’s. Don’t think that these types of frauds and thefts are anything new– people have been doing them forever, and they will always be around. There’s always a new way to embezzle or otherwise trick people out of their money, and those mentioned above are perfect examples of some of those things.
In such cases big or small you will need a highly regarded Securities fraud attorney to ensure you stand a chance to recover any lost investment.
My name is Geoff Leary and I wanted to build rocket ships, but I’m settling for being a freelance writer here in Upstate New York. I like to take action & make inspiration. I write about a range of topics, just to keep things crispy and fresh.