MOTOROLA SOLUTIONS SETTLES SECURITIES FRAUD SUIT FOR $200 MILLION
February 02, 2012 | By Ameet Sachdev | Tribune reporter
Motorola Solutions Inc. will pay $200 million to settle a 2007 securities fraud lawsuit brought by shareholders.
Attorneys representing the shareholders disclosed the proposed settlement Thursday evening, which was also filed with a federal court in Chicago where the case was brought. The settlement is subject to court approval.
The suit, which sought class-action status, was filed before Motorola split into two companies last year. It alleged that Motorola had artificially inflated its stock by misrpresenting the company's projected revenue for the third and fourth quarter of 2006.
Motorola Solutions inherited the litigation after it split last year from the cellphone business now known as Motorola Mobility. The two had hired a mediator to resolve the dispute. In December, the mediator proposed that Motorola Solutions settle for $200 million, which the parties accepted, according to court papers.
"We're pleased to have this behind us as it removes the risk and distraction of this litigation," said company spokesman Nicholas Sweers. "It also enables us to continue to focus on delivering mission-critical communications solutions to government and enterprise customers."
The plaintiffs were led by the Macomb County Employees' Retirement System and St. Clair Shores Police and Fire Pension System. They were represented by the San Diego-based law firm of Robbins Geller Rudman & Dowd, which specializes in securities fraud matters.
"The settlement represents an extraordinary recovery for investors in a case where there was no financial restatement or SEC investigation," Samuel Rudman, one of the plaintiffs' attorneys, said in a statement. "Our clients deserve all the credit. They alone sought to represent the class and they led the investigation and prosecution of the action from start to finish on behalf of Motorola shareholders."
Sweers said the settlement amount is covered by a combination of previously booked reserves and insurance. In its fourth-quarter earnings announced last week, Motorola Solutions reported an 8-cents-per-share& charge related to a "legal matter." The matter was the securities suit.
Shareholders who acquired stock between July 19, 2006, and Jan. 4, 2007, may be eligible for a recovery.
The plaintiffs' attorneys are seeking fees of 27.5 percent of the settlement, or $55 million, and expenses of up to $4.95 million, according to the settlement agreement.
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Motorola Solutions settles securities fraud suit. (Bloomberg N