KANSAS CITY, Kan. (Legal Newsline) - The nation’s third-largest wireless service provider, Sprint Corp., has agreed to pay out $131 million to settle a class action lawsuit filed against it for allegedly defrauding investors.
The initial complaint in the securities class action was filed in the U.S. District Court for the District of Kansas at Kansas City in March 2009. Sprint is headquartered in Overland Park, Kan.
In June 2009, the federal court appointed PACE Industry Union-Management Pension Fund, Skandia Life Insurance Company and the West Virginia Investment Management Board the lead plaintiffs.
The plaintiffs -- those persons who purchased or otherwise acquired the common stock of Sprint Nextel Corp. between Oct. 26, 2006 and Feb. 27, 2008 -- allege Sprint and some of its executives issued “materially false and misleading” statements regarding the company’s business and financial results.
As a result of those false statements, Sprint stock traded at artificially inflated prices, the class argues.
The all-cash settlement was filed last week. The deal still requires court approval.
The company, while agreeing to settle, still denies all of the claims alleged by the plaintiffs.
“Defendants believe that the evidence developed to date supports their position that they acted properly at all times and that the litigation is without merit,” according to a 28-page stipulation of settlement, filed March 30. “In addition, defendants maintain that they have meritorious defenses to claims alleged in the action.”
However, Sprint noted that continuing to litigate the case would be “protracted and expensive.”
“Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases such as the litigation,” according to the filing. “Defendants have, therefore, determined that it is desirable and beneficial to them that the litigation be settled in the manner and upon the terms and conditions set forth in this stipulation.”
Though they believe their claims have merit, the plaintiffs agree the expense and length of continued proceedings also is too much.
“Lead plaintiffs and their counsel believe that the settlement set forth in the stipulation confers substantial benefits upon the class,” according to the filing.
Sprint could not be reached for additional comment.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.