Motorola, N.J. settle for $190 million
TRENTON, N.J. - New Jersey Attorney General Stuart Rabner says he has reached a settlement with Motorola worth $190 million.
New Jersey is the lead plaintiff in a class action securities fraud lawsuit filed against the company in January of 2003. The plaintiffs allege Motorola misled shareholders about the nature of its business dealings with the Turkish telecommunications company Telsim.
Rabner says that among the victims of the fraud was the New Jersey pension fund, which at one point held approximately 2.7 million shares in Motorola. He says the fund lost about $7 million.
"Securities fraud denies investors the opportunity to make informed decisions," Rabner said. "In this instance, Motorola withheld information from the investing public, which resulted in the New Jersey pension fund and others losing money. This settlement rights that wrong and serves notice on corporations to act openly and honestly."
Deputy Attorney General Carol G. Jacobson handled the Motorola settlement on behalf of the state, acting as liaison with outside counsel. Listed as counsel on the pleadings are five firms: Robinson, Curley and Clayton of Chicago; Wolf Popper LLP of New York; Lite, DePalma, Greenberg and Rivas of Newark, N.J.; Stull, Stull and Brody of New York; and Robert D. Allison and Associates of Chicago.
The suit alleged Motorola boasted lucrative equipment sales contracts with Telsim, yet did not tell investors that it had loaned Telsim billions of dollars to enable the purchases. It also said Motorola inflated quaterly sales and income figures relative to its sale of handsets and other telecommunications equipment to Telsim.
The settlement was reached last Thursday and must be approved by U.S. District Court Judge Rebecca Pallmeyer in Chicago.
If she approves it, notice will be sent to all members of the class -- those individuals who held stock in Motorola between Feb. 3, 2000-May 14, 2001.
Motorola must deposit the $190 million into an interest-bearing account within 30 days of the April 12 signing date.