|
|
 | ||
| ||
|
|
|
News < Back Sarbanes Oxley : Law Institutional Investors Win $200 Million Judgment Grant & Eisenhofer represents group of bondholders in bankrupt hazardous waste management company; Only fifth securities fraud case to go to trial since passage of passage of PSLRA a decade ago
It was only the fourth securities fraud case to reach trial since the passage of the Private Securities Litigation Reform Act of 1995. The litigation arose out of the demise of Safety-Kleen, a hazardous waste disposal company which filed for bankruptcy in June 2000. After going public in April 1997, Safety-Kleen restated its 1997, 1998 and 1999 financial statements by over $500 million. The institutional investors, led by American High Income Trust, were purchasers of Safety-Kleen?s high yield debt. Claims were brought against the directors, officers and auditors for filing false registration statements pursuant to the 1933 Securities Act; filing false annual reports pursuant to Section 18 of the 1934 Exchange Act; and for violating the antifraud provisions of Section 10(b) of the 1934 Exchange Act. Criminal indictments, and one guilty plea, had already been obtained by the government against certain of Safety-Kleen?s former officers, and Messers. Winger and Humphreys have previously been fined and barred by the SEC from ever holding office in a public company. Investors claimed that PricewaterhouseCoopers, which had been Safety-Kleen?s outside auditor at the time the bonds were issued, certified false financial statements as part of the company?s registration documents for its bond offerings. The trial, which began in early March, was one of only a handful of securities cases to actually go to a jury trial in the last decade. Lead counsel Stuart Grant of Wilmington, DE and New York-based Grant & Eisenhofer explained, ?We are extremely pleased with the results. We have obtained a recovery of approximately 30% of our clients? losses from the outside directors and auditors, as well as a judgment for the remaining 70% against the company?s top two management insiders. Not only was this an excellent economic recovery, but it should send a message loud and clear to auditors and audit committees that they must take a pro-active role to prevent fraud.? Chief Judge Joseph F. Anderson of the District of South Carolina, in preliminarily approving the settlement with the auditors and outside directors, commented about the dearth of securities trials and the difficulty in presenting such trials to a jury. Judge Anderson noted that Congress and the Appellate Courts had given little guidance to the trial courts as to how to present securities actions, particularly complicated class cases, to a jury. The settlement with PwC and the outside directors not only covered the Securities Act Class Action case but also 32 individual actions brought by institutional investors under the Exchange Act. PricewaterhouseCoopers was represented by Gibson Dunn & Crutcher. The outside directors were represented by Sidley Austin Brown & Wood LLP; Nelson Mullins Riley & Scarborugh, LLP; and Cotsirilos, Tighe, & Striker, Ltd. 
|
|
|
||||||||||||
 | |||
| |||
| |||
|
© 2019 Simplex Knowledge Company. All Rights Reserved. | TERMS OF USE | PRIVACY POLICY |
