Shareholders sued Seagate Technology in this 10b-5 case, arguing that they had been misled by announcements from company officials.
Retained by Wilson Sonsini Goodrich & Rosati
Shareholders sued Seagate Technology in this 10b-5 case, arguing that they had been misled by announcements from company officials. In support of defendants’ motion for summary judgment, Dr. Allan Kleidon, a senior vice president of Cornerstone Research, provided an event study that examined the effect of the announcements on Seagate’s stock price. In February 1994 U.S. District Judge Vaughn R. Walker ruled for the defendants on all alleged affirmative misstatements. In February 1995 he ruled for the defendants on the remaining alleged omissions, stating:
Plaintiffs have repeatedly argued that defendants’ conduct, as a whole, defrauded investors by not revealing material information known to defendants about changes in the disk drive marketplace. Notwithstanding the volume of paper submitted in support of their claims, plaintiffs have failed to provide sufficient evidence to demonstrate the existence of triable issues of fact. The 20-20 lens of hindsight shows defendants misjudged their market, causing Seagate’s profitability to plummet in the end of its 1988 fiscal year. The securities laws … can only deter fraud. And of fraud there is simply no proof.