Federal judge rejects settlement of fraud suit against Halliburton
30 Sept. 2004
WASHINGTON, Sept. 30 (HalliburtonWatch.org) -- A Dallas federal judge rejected a planned $6 settlement of a lawsuit filed by shareholders who say the company committed fraud on its financial statements. U.S. District Court Judge Barbara M.G. Lynn said the law firm that negotiated the settlement, Schiffrin & Barroway, failed to consult with all lead plaintiffs and their lawyers during settlement negotiations, thereby nullifying the legitimacy of the settlement. She also said the settlement was inadequate and unreasonable.###
The four lead plaintiffs, who represent thousands of shareholders, allege that Halliburton failed to inform investors of an accounting change that artificially boosted profits and made financial statements appear more healthy than was actually the case. They say the artificial boost in earnings concurrently boosted the company's stock price, thereby forcing plaintiff-investors to purchase the company's stock at a fraudulently higher price. The alleged accounting fraud occurred on financial statements issued from 1998 to 2001. U.S. Vice President Dick Cheney headed Halliburton from 1995 to 2000, but he was not named as a defendant in the lawsuit.
In rejecting the settlement, Judge Lynn appointed an independent trustee, known as a guardian ad litum, to oversee the interests of the plaintiffs.
Three of the four lead plaintiffs accepted the settlement but the lawyers for the fourth lead plaintiff, the Archdiocese of Milwaukee Supporting Fund, objected to the amount.