Labaton Sucharow served as liaison counsel in an action against Japanese consumer electronics company Olympus Corporation filed in Japan alleging a longstanding accounting fraud.
The case arises from Olympus’ admission on November 7, 2011 that it had been falsely representing its financial health to investors by concealing serious losses incurred from as far back as the 1990s. After a whistleblower complaint by Olympus’ CEO brought attention to exorbitant “advisory fees” being paid for several acquisitions, Olympus acknowledged that, since 1998, it had been engaging in a complex accounting scheme to hide massive losses on its balance sheet under the cover of legitimate acquisitions. Following these revelations, Olympus lost almost 80 percent of its market capitalization. The Japanese government brought a criminal case against Olympus and several of its executives. On September 25, 2012, during the first day of the trial, Olympus and three of its former executives pleaded guilty.
On December 26, 2016, the Tokyo District Court approved an in-court settlement between Olympus and a group of clients represented by Deminor Recovery Services (Deminor) and local Japanese counsel. Deminor’s plaintiff group consisted of more than 60 institutional investors who filed an action against Olympus before the Tokyo District Court in December 2012.
The plaintiffs recovered approximately 45 percent of the recoverable losses claimed in the lawsuit. This settlement is the highest recovery percentage to date achieved by non-Japanese investors in any of the securities lawsuits settled by Olympus.