U.S. District Judge John F. Walter of the U.S. District Court for the Central District of California threw out the suit against Hansen Natural Corporation, finding that plaintiffs had not supplied specific enough evidence to support securities fraud allegations.
The suit charged the firm with issuing false and misleading reports not disclosing the backdating activities, that the firm lacked proper internal financial controls and couldn’t actually ascertain its true financial picture and that Hansen had engaged in improper accounting practices.
The suit charged the backdating affected shareholders who purchased company stock between November 12, 2001 and November 9, 2006.
“… the plaintiff has failed to allege at a minimum the ‘who, what, when, where and how’ of his (securities) fraud allegation,” Walter wrote in his opinion. “…..For example, where Plaintiff alleges the existence of an ‘unlawful backdating scheme,’. he does not set forth any of the factual allegations including when option grants were backdated, how the option grants were backdated, who was involved in the backdating, and what compensation expense was associated with the backdating.”
Walter also refused plaintiffs’ request for permission to amend the suit.
Walter’s order inIn re Hansen Natural Corp. Securities Litigation, No. CV 06-7599-JFW (C.D. Cal. Oct. 16, 2007).is here .
« SEC Comp Disclosures Get CFO Support