The $259 million cash settlement reportedly recovers a substantial portion of the damages suffered by the Class, which includes all persons who purchased 3Com common stock between April 23, 1997 and November 5, 1997, inclusive. The Louisiana Pension Funds had purchased more than 127,000 shares of 3Com during the period.
The Louisiana Pension Funds and other plaintiffs had alleged that, in connection with 3Com’s acquisition of U.S. Robotics in June 1997:
– the defendants made false and misleading
statements regarding USR’s modem business and
– issued false and misleading financial statements to the investing public.
The suit also claimed that officers/directors of the defendant firms sold more than 4 million shares during the period, allegedly profiting from the misrepresentations.
Taking the Lead
The Louisiana School Employees’ Retirement System and the Louisiana Municipal Police Employees’ Retirement System (the “Louisiana Pension Funds”) were appointed as principal lead plaintiffs in this action by the United States District Court for the Northern District of California.
The court took that action pursuant to the Private Securities Litigation Reform Act in March 1998, which was enacted to encourage institutional investors to serve as lead plaintiffs in these cases.
The settlement also includes certain corporate governance relief, including:
– appointment of a senior 3Com officer to enforce
3Com’s trading and market communications policy
– development of a program to ensure compliance with 3Com’s trading policies
– ensuring that the Audit Committee of the Board of Directors of 3Com will be have at least three independent directors
– Nevin Adams