Achieving Extraordinary Results Across Borders in an Egregious Case of Securities Fraud
In re Satyam Computer Services Ltd. Securities Litigation
When companies fail to meet the most elementary auditing standards and misrepresent their values to their investors, Labaton Sucharow will fight to obtain recoveries that match such egregious actions.
In an international case against what was once India's fourth-largest outsourcing company, Satyam Computer Services, lead plaintiffs allege that Satyam Computer Services Ltd., related entities, its auditors and certain directors and officers made materially false and misleading statements to the investing public about the company's earnings and assets, which had the effect of artificially inflating the price of Satyam securities.
In the case known as "India's Enron," Labaton Sucharow acted as co-lead counsel, representing lead plaintiff, the UK-based Mineworkers' Pension Scheme. The case presented many legal challenges, including the difficulty of proving auditor liability, especially with respect to PricewaterhouseCoopers USA, which only had a limited role in Satyam's audit. We also spent considerable time consulting with Indian legal experts to respond to the defendant's motion to dismiss on forum non conveniens grounds. But Labaton Sucharow's ability to overcome these hurdles with superior legal strategy allowed for extraordinary recoveries.
On September 30, 2011, the court granted final approval to a settlement with Satyam of $125 million, with the possibility of an additional recovery in the future. The court also granted final approval to a settlement with PricewaterhouseCoopers in the amount of $25.5 million. Litigation continues against additional defendants.
The international nature of this litigation may also makes it a test case for the application of U.S. securities law to claims based on purchases by U.S. residents on a foreign exchange.