It came to light this weekend that a federal judge granted class action status earlier this month to shareholders filing lawsuits against Interpublic Group, the globe's largest agency holding company.
The ruling by Judge Denise Cote in US District Court, Southern District of New York. was made November 7. Her decision hikes the lawsuit to "much higher stakes", believes Ron Marmer, partner and co-chair of the litigation practice group at Jenner & Block.
Judge Cote's decision follows her earlier ruling in May when she rejected Interpublic's motion to dismiss all four counts in the class action which seeks unspecified damages. IPG shareholders had filed four counts against the company, alleging that Interpublic and eight of its senior executives misled investors by overstating net income and earnings per share from 1997 through 2000.
But Cotes threw out only one of the four counts -- that each of the eight executives named acted with an intent to defraud investors. Her decision allows the case to move into the 'discovery' phase of the legal process.
There are two classes of plaintiff seeking damages from Interpublic. (1) Investors who bought shares between October 28, 1997 and October 16, 2002; and (2) those who acquired Interpublic common stock in exchange for shares of True North Communications' common stock following IPG's takeover of the former company.
Documents filed with the court indicate that the parties have held settlement talks in recent months, although no agreement has been reached.
Data sourced from: AdAge.com; additional content by WARC staff