Friday, September 20, 2013
Labaton Sucharow Secures a $97.5 Million Settlement in Rocket Docket Case
NEW YORK (September 20, 2013) – Labaton Sucharow served as lead counsel on behalf of one of the largest Canadian pension funds, Ontario Teachers' Pension Plan Board, in the class action In re Computer Sciences Corporation Securities Litigation, Civ. No. 11-610-TSE-IDD in the "rocket docket" jurisdiction of the Eastern District of Virginia.
As sole lead counsel, Labaton Sucharow secured a $97.5 million settlement with Computer Sciences Corporation ("CSC"), Michael W. Laphen and Donald G. Debuck (collectively, the "Defendants"). The settlement, the third largest all-cash recovery in a securities class action in the Fourth Circuit and the second largest all-cash recovery in such a case in the Eastern District of Virginia, resolved all claims in the action.
Class Representative, on behalf of the Settlement Class, alleged that CSC, an IT consulting and outsourcing company, fraudulently inflated its stock price by misrepresenting and omitting the truth about the state of its most visible contract and the state of its internal controls. In particular, Class Representative alleged that CSC assured the market that CSC was performing on a $5.4 billion contract with the U.K. National Health Services ("NHS") when in fact, however, CSC internally knew that CSC could not deliver on the contract, had departed from the terms of the contract, and as a result was not properly accounting for the contract. Class Representative alleged that Defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and rule 10b-5 promulgated thereunder by making false and misleading statements or omissions about the contract with NHS and CSC's internal controls. Class Representative also alleged that these false statements and omissions caused the price of CSC common stock to be artificially inflated during the Class Period and that the price of CSC common stock dropped by 50 percent when the true extent of CSC's problems were disclosed.