05-05-2006, 10:18 PM
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Member
Join Date: Jul 1997
Local Time: 03:29 PM
Local Date: 11-18-2008
Posts: 20,941
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Securities Class Action suit against XMSR
http://news.moneycentral.msn.com/tic...Symbol=US:XMSR
Quote:
Law offices of Brodsky & Smith, LLC announces that a securities class action lawsuit has been filed on behalf of shareholders who purchased the common stock and other securities of XM Satellite Radio Holdings, Inc.. (NASDAQ: XMSR) ("XM Radio" or the "Company") between July 28, 2005 and February 15, 2006, inclusive (the "Class Period"). The class action lawsuit was filed in the United States District Court for the District of Columbia.
The Complaint alleges that defendants violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of XM securities.
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The argument as laid out on CNBC is that XMSR provided false prospectus to potential investors as to the value of it's stock.
Second Suit:
Quote:
The Complaint charges XM Satellite Radio Holdings, Inc., and its President and Chief Executive Officer, Hugh Panero, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the market during the Class Period. As alleged in the Complaint, defendants made misrepresentations and/or omissions regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality, and as known to or recklessly disregarded by defendants, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005, in order to stay on track to achieve its stated goal of 6 million subscribers at year end by reason of competitive factors known to defendants since before the beginning of the Class Period. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting and touting throughout the Class Period.
During the class period, several key insiders of XM made huge sales of their personal holdings in the fourth quarter of 2005, taking advantage of the artificial inflation of XM's common stock. Specifically, defendant Panero sold 413,334 shares on December 6, 2005, at prices ranging between $28.37 and $28.95 to reap proceeds of $11,846,000, thus selling 99% of his holdings in XM.
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http://news.moneycentral.msn.com/tic...Symbol=US:XMSR
Last edited by Chris : 05-05-2006 at 10:22 PM.
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