Improper Accounting Adjustments Held Insufficient Basis for Securities Fraud Claims


A federal district court in California recently dismissed class action securities fraud claims arising out of several improper accounting adjustments made by VeriFone Holdings, Inc. On September 15, 2010, purchasers of VeriFone common stock filed their Third Amended Complaint in a consolidated securities fraud class action against the corporation and certain of its officers and directors. Plaintiffs alleged that defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5 by engaging in a scheme to defraud, making false statements, omitting material facts and performing deceptive acts which led to the gross overstatement of operating income and, ultimately, the restatement of VeriFone's financials. Defendants moved to dismiss, arguing, among other things, that that plaintiffs did not adequately allege scienter as to each individual or the corporation.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Written by:


Katten Muchin Rosenman LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.