Motorola has lost a bid to dismiss a lawsuit which is accusing the company, and former CEO Ed Zander of misleading investors about the company's prospects. In the ruling, Chicago's U.S. District Judge James B. Moran said that the plaintiff, Eric Silverman had made sufficient allegations of wrongdoing to withstand the challenge from Motorola.
Silverman's lawsuit was filed in August 2007 and seeks class-action, or group, status on behalf of everyone who bought Motorola stock from July 2006 to January 2007.
Although the court said that the case can proceed, it did strike out several clauses and absolved two of the company's executives of liability for others. The Judge decided that the company's new CEO, Gregpry Brown and Daniel Moloney, now head of Motorola's advanced research group would not have been in a position to know about any alleged misleading statements issued by the company.
The lawsuit claims that the board of Motorola repeatedly made claims about strong growth and prospects, despite posting regular quarterly losses. The company has since decided to spin-off its handset division into a separate company.
The case is Silverman v. Motorola, U.S. District Court, Northern District of Illinois, Eastern Division (Chicago).
Posted to the site on 26th September 2008
Posted to: www.cellular-news.com/story/33840.php