The Associated Press reports the employees claim Tyco hid the true value of the stock and knew it was a bad investment. The class covers employees who invested their retirement savings in the company’s stock from August 12, 1998 to July 25, 2002.
Tyco argued the employees wanting to represent the class were not typical of all workers who invested in company stock because they relied on financial information the company provided in differing degrees, according to the AP. However, the US district judge said, in cases involving stock fraud and a company’s failure to disclose important information, the Supreme Court does not require investors to prove their reliance on information from the company.
Tyco is facing a number of shareholder lawsuits alleging accounting fraud in which the company misrepresented the value of Tyco and companies it acquired under former CEO Dennis Kozlowski’s leadership.
Kozlowski and former Chief Financial Officer Mark Swartz were convicted last year of multiple counts of grand larceny, conspiracy, securities fraud and falsifying business records (See Tyco Shareholders Turn Thumbs Down on Proposals ).
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