Trial against collapsed company begins
HARTFORD, Conn. - The State of Connecticut's gripe with a California fiber optics company was scheduled to go to trial Monday in a federal court in California.
State Attorney General Richard Blumenthal alleged JDS Uniphase Securities hid the fact that it expected heavy losses in 2001 from its group of investors, which included the Connecticut Retirement Plans and Trust Funds.
Blumenthal says investors lost billions of dollars because of JDS, which lost 99 percent of its value. The State of Connecticut is the lead plaintiff in a class action suit because it alleges the largest loss ($65 million).
"The company and its owners secretly jumped ship, leaving investors to sink," Blumenthal said. "I will vigorously assist efforts to recover tens of millions in state dollars lost when JDS executives misled investors, even as they cashed out by cashing in on inside information.
"This trial sends a powerful message: Lie about your company's financial situation and you will pay a heavy price."
JDS still operates, though Blumenthal says it unlikely the State will recover all $65 million. The CRPTF includes six state pension and eight state trust funds. Blumenthal hired Labaton Sucharow of New York to try the case.
It is alleged that four JDS executives sold $850 million in stock in a 20-month period leading up to the company's implosion, which featured a layoff of 83 percent of employees and the closings of 29 offices and plants.