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Telecommunications systems

Class Action Lawsuits Filed Against Four Major Companies: Baker Hughes, Inc., Legato Systems, Inc., Lucent Technologies, Inc., and Tyco International, Ltd.

Strategic Insights

— 1 min read

Over the past three decades, Kaplan, Kilsheimer &Fox LLP has actively participated in prosecuting investor class actions and financial fraud cases, resulting in substantial recoveries. The law firm has filed Class Action Complaints against Baker Hughes, Inc., Legato Systems, Inc., Lucent Technologies, Inc., and Tyco International, Ltd. on behalf of investors who purchased securities during specified periods. The lawsuits allege accounting irregularities, insider trading, and violations of securities laws, resulting in significant losses for investors.

Key Takeaways:

  • Baker Hughes, Inc. was accused of accounting irregularities, with the price of its common stock dropping from $36.25 to $19.25 per share after disclosures of "various accounting issues" at its Inteq drilling services unit.
  • Legato Systems, Inc. was charged with concealing flagging growth and using artificially inflated stock to fund acquisitions, resulting in a 63% decline in stock price from its Class Period high.
  • Lucent Technologies, Inc. was accused of misleading investors about its restructuring plan, with the price of its common stock falling 38% from its Class Period high after the revelation of disappointing quarterly results.
  • Tyco International, Ltd. was accused of utilizing accounting methods to mislead investors about the growth of acquired companies, resulting in insider traders selling over 2.7 million shares of stock for proceeds of at least $270 million.
  • The lawsuits were filed in various federal district courts, including the Northern District of California.
  • Investors who purchased or acquired securities during the specified periods may be eligible to participate in the class actions.

Statistics:

  • $40-50 million: The cumulative pretax effect of accounting irregularities at Baker Hughes, Inc.
  • $11.7 million: The insider trading proceeds reaped by Legato Systems, Inc.
  • 63%: The decline in Legato Systems, Inc. stock price from its Class Period high.
  • 38%: The decline in Lucent Technologies, Inc. stock price from its Class Period high.
  • 2.7 million: The number of shares of Tyco International, Ltd. stock sold by officers during the Class Period.
  • $270 million: The proceeds from the sale of Tyco International, Ltd. stock by officers during the Class Period.

Sources:

  • Kaplan, Kilsheimer &Fox LLP, Press Release, January 31, 2000.
  • Baker Hughes, Inc. SEC Filings.
  • Legato Systems, Inc. SEC Filings.
  • Lucent Technologies, Inc. SEC Filings.
  • Tyco International, Ltd. SEC Filings.

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