We have to admit that we were crying into our Cheerios a little this week, as the two securities class action cases we thought were going to trial ended up not going that route (keep reading for an update on those two cases) during the first quarter of 2008.

But then we saw that a trial has started in Germany over a share offering in in June 2000 by Deutsche Telekom, the former state owned telecommunications concern.

While the US securities class action settled in 2005 for $120 million, this case is the first test of Gesetz über Musterverfahren in kapitalmarktrechtlichen Streitigkeiten or KapMug which loosely translates to "statute governing representative legal actions on the grounds of capital markets disputes." KapMug was introduced in Germany to deal with mass claims in cases concerning the capital markets.

The Deutsche Telekom matter has generated enough interest and has enough participants that the court hearing the matter was "forced the court to rent a civic hall that provides room for 600 people." Indeed, according to an article from Spiegel Online, approximately 900 lawyers are representing the shareholders.

Though press reports are a bit inconsistent, a few things are clear:

1. The class numbers between 16-17,000.
2. The plaintiffs are seeking approximately $126 million in damages.
3. The German plaintiffs had to wait substantially longer than the US plaintiffs for their day in court.

Spiegel Online, Bloomberg, and the AP all have stories on the Deutsche Telekom case.

For the record, Omnicom Group and Oracle Corp were the two cases scheduled to go to trial that we alluded to earlier.

According to Omnicom's 10-Q for the period ended September 30, 2007, "a trial on any remaining portion of plaintiff’s claim is currently scheduled for the first quarter of 2008."

But, in January, Judge Pauley granted the defendants motion for summary judgment. So that was strike one for our securities class action trial predictor (the 7940 Series).

We did not despair, as we had already found a pre-trial order in the Oracle litigation that set the jury trial for March 24, 2008.

But then we saw this motion, seeking an order vacating the March 24, 2008 trial date and reassignment of the case to another district court judge, as Judge Jenkins had been nominated to a seat on the California Court of Appeal, First District.

And finally we saw this notice, vacating all pretrial deadlines and the trial date. Interestingly enough though, Judge Jenkins intends to "resolve the submitted Motions For Summary Judgment before reassigning the case."

Of course, none of this requires us to update our presentation (here) of the 20 federal securities class action cases that have gone to trial since 1996.

Friday, February 22, 2008

Updates, Updates, and More Updates

We track a whole bunch of things here at SLW. Federal securities class action trials, options backdating cases, and opt-out cases in Tyco, Vivendi, and Merck to name a few. There are a bunch of updates to report, so let's dive in.

Securities Class Action Trials - "The List"

Some unrelated research revealed that we had missed a case that had gone to trial back in 2002. The case, Claghorn v. Edasco Ltd. was originally brought against Scorpion Technologies, certain Scorpion officers, and Grant Thornton, LLP, the company’s auditor. The litigation settled against those defendants, and the settlement with Grant Thornton included an assignment of claims

Plaintiffs filed a separate complaint that alleged that Edsaco had participated in a scheme to deceive Grant Thornton. After a two week trial, the jury returned a verdict against Edsaco, for $5.78 million in compensatory damages and $165 million in punitive damages. The litigation then settled for $10 million. The conduct at issue in Claghorn was all Pre-PSLRA, so it falls into our third bucket.

Our updated presentation (here) now details the 20 securities class action cases that have gone to trial since 1996.

The cases fall into three categories:

1.Securities Class Action Trials Based on Post-Reform Act Conduct Resulting in a Verdict at Trial (six)

2. Securities Class Action Trials Based on Post-PSLRA Conduct Resulting in a Settlement or Summary or Default Judgment During Trial (seven)

3. Securities Class Action Trials Based on Pre-PSLRA Conduct Resulting in a Verdict at Trial (seven)

Tyco Opt-outs

Second on our list of updates - the Michigan public pension funds, represented by Kaplan Fox, have filed a Tyco opt-out case. The Michigan funds join just one other public pension fund that has filed an opt-out case in Tyco. Details on all of the Tyco opt-outs can be found here.

Vivendi Opt-outs

Another international institutional investor, Wiener Städtische AG Vienna Insurance Group, has filed a Vivendi opt-out case. Wiener Städtische is represented by Motley Rice. Our complete list of Vivendi opt-outs can be found here.

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Wednesday, January 16, 2008

Tallying Up the Federal Securities Class Action Trials - UPDATED

With the Apollo Group verdict now in, we have updated (again) our presentation detailing the 19 securities class action cases that have gone to trial since 1996.

The cases fall into three categories:

1.Securities Class Action Trials Based on Post-Reform Act Conduct Resulting in a Verdict at Trial (six)

2. Securities Class Action Trials Based on Post-PSLRA Conduct Resulting in a Settlement or Summary or Default Judgment During Trial (seven)

3. Securities Class Action Trials Based on Pre-PSLRA Conduct Resulting in a Verdict at Trial (six)

As always, readers are encouraged to send in any updates, additions, or corrections.

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Apollo Group - The Verdict is In

Press reports indicate that a federal jury has found Apollo Group Inc. (NASDAQ: APOL) and certain former officers liable for securities fraud and has ordered them to pay $280 million to shareholders in the securities class action suit pending in the District of Arizona.

Apollo Group is the for-profit company that owns the University of Phoenix. The company has a website dedicated to the securities litigation, here.

The company has issued the following statement:

Apollo Group, Inc. (NASDAQ:APOL) is disappointed in the decision returned today by a Phoenix jury in a consolidated securities class action brought by the Policemen’s Annuity and Benefit Fund of Chicago. The case, tried in federal district court in Arizona, was premised on Apollo’s supposed failure to disclose unsubstantiated allegations from a preliminary government report.

“We disagree with the jury’s verdict, both the finding and the amount of damages,” said Wayne W. Smith of Gibson Dunn & Crutcher LLP, counsel to Apollo. “The law does not require the disclosure of preliminary or unproven charges in a government investigation. In not disclosing the report at issue, Apollo acted in good faith and in the best interests of its students, alumni, employees and shareholders, who could have been unfairly harmed by a premature disclosure.”

...

Apollo is evaluating options for appeal.

No comment yet from the plaintiffs or their counsel, but stay tuned.

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Thursday, January 3, 2008

Apollo Group trial updates

First, best wishes for a happy and healthy year to all of my readers.

Now, on to the good stuff, with two updates on the Apollo Group trial that has been going on in the District of Arizona.

Back on December 12, the plaintiffs rested their case and defendants moved for a directed verdict on the issue of loss causation. Judge Teilborg denied the motion, noting:

I'm finding that it is a question for the jury to decide whether or not and when there was a corrective disclosure seems to me this jury can conclude that the facts did, to use I think a word the plaintiffs have used, did dribble into the marketplace, and that the [UBS] analyst Kelly Flynn and the reports of that date [September 20, 2004] did indeed connect dots in such a way that they became the corrective disclosure.

And earlier this week, the parties had a meet and confer and agreed to present closing arguments on January 9, 2008, or on the next full day of trial.

The oddsmakers in Vegas are suggesting that we will have a verdict by January 10th.

Special thanks to Jeffrey A. Barrack, a Barrack, Rodos & Bacine partner and member of the trial team for finding the time to send us this stuff.

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Wednesday, November 28, 2007

Tallying Up the Securities Class Action Trials

We have updated (again) our presentation detailing the 19 securities class action cases that have gone to trial since 1996.

The cases fall into three categories:

1.Securities Class Action Trials Based on Post-Reform Act Conduct Resulting in a Verdict at Trial (five)

2. Securities Class Action Trials Based on Post-PSLRA Conduct Resulting in a Settlement or Summary or Default Judgment During Trial (seven)

3. Securities Class Action Trials Based on Pre-PSLRA Conduct Resulting in a Verdict at Trial (six)

Note that we have not yet added the Apollo Group case to the presentation, but will do so when it fits into one of our three categories.

Thanks to Jay Eng of Berman DeValerio Pease Tabacco Burt & Pucillo for reminding us of the Heartland High-Yield Fund trial from 2005.

As always, readers are encouraged to send in any updates, additions, or corrections.

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Tuesday, November 27, 2007

And the Verdict is...Defense

According to news story from Reuters (here) and the AP (here), the jury in the JDS Uniphase trial has delivered a defense verdict after hearing nearly three weeks of testimony.

There have been 19 securities class action trials since 1996, but this is only the 5th post-PSLRA case tried to a verdict. Our updated securities class action trial list will be available here shortly.

Stay tuned for more developments in the Apollo Group trial.

UPDATE: The Recorder has an article, here, and both The D&O Diary and The 10b-5 Daily have posts on the verdict.

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Friday, November 16, 2007

Lightning Really Does Strike Twice

We spilled a whole of ink (well pixels) last month discussing the newest addition to that rarified group - the securities class action that has gone to trial.

Well, add another one to the list.

While reviewing Apollo Group's (NASDAQ: APOL) recent 10-K last night, we noticed the following blurb with respect to the securities class actions that were filed against the company and certain officers and directors back in October 2004:

The court denied both summary judgment motions on September 12, 2007. The case remains set for trial on November 14, 2007.

We then sped over to the U.S. District Court for the District of Arizona's website and looked up the calendar of Judge James A Teilborg, and sure enough, jury selection was on the calendar for November 14. A quick look at the docket revealed that a jury was selected and empaneled.

For those keeping score at home, the Apollo Group litigation is only the 18th securities class action to go to trial since 1996.

The Policemen's Annuity and Benefit Fund of Chicago is the lead plaintiff and Barrack, Rodos & Bacine is lead counsel. Gibson, Dunn & Crutcher and Snell & Wilmer are defense counsel.

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Friday, October 26, 2007

Really Updated List of Securities Class Action Trials

Already the reader input is pouring in here at Securities Litigation Watch world headquarters.

We have updated our list of securities class action that have gone to trial to add Vladimir v. U.S. Banknote Corp., which was tried in 1997 to a jury verdict for the plaintiffs, but settled prior to the entry of a judgment and ruling on the defendants motions for summary judgment and for a new trial.

This case fits into our third bucket (Securities Class Action Trials Based on Pre-PSLRA Conduct Resulting in a Verdict at Trial).

The new list is available here.

Readers are again encouraged to send in any updates, additions, or corrections.

Special thanks to Alan Arkin of Arkin Kaplan Rice LLP for pointing the U.S. Banknote trial out to us.

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Wednesday, October 24, 2007

JDS Uniphase Update - It's Official, We Have a Trial

Press reports are starting to trickle in and they indicate that the plaintiffs made their opening statement on Tuesday and the defendants were set make their opening statement this morning in the JDS Uniphase securities litigation trial.

Reuters has a story here and the AP has a story here.

The trial is scheduled for 19 days.

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Monday, October 22, 2007

A New Addition to The Securities Class Action Trial List?

Way back in 2003, our predecessor at SLW started a list of all of the securities class actions that had gone to trial since the PSLRA was enacted. The results were updated several times over the years, but until this week, it appeared that the dearth of trials was set to continue.

But that may be about to change. A quick look at the calendar of Judge Claudia Wilken reveals that jury selection has begun in the In re JDS Uniphase Securities Litigation and the trial is set to commence as soon as tomorrow.

The Connecticut Retirement Plans and Trust Funds is the lead plaintiff and Labaton Sucharow LLP is lead counsel. Morrison & Foerster LLP and Heller Ehrman LLP represent JDS Uniphase (NASDAQ: JDSU) and the individual defendants.

We will keep you updated as events unfold.

Full disclosure: Once upon a time, the author worked on the JDS Uniphase litigation, representing one of the sub-class representatives, the Houston Municipal Employees Pension System.

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