A federal court jury in New York has found that Paris-based Vivendi misled investors about the company’s financial health from 2000 to 2002. The jury found the company liable on all 57 counts of violating U.S. securities laws in a shareholder lawsuit. The case was one of several class-action lawsuits brought against Vivendi by shareholders. The jury did not award any damages in the case. That will be determined after shareholders file their individual claims.
As you may know, Vivendi had transformed itself from a water utility into a media and telecommunications giant, buying up Universal Studios and other properties that saddled the company with a crippling $77 billion debt. As a result, the company’s stock price dropped sharply.
Interestingly, Jean-Marie Messier, the company’s former chief executive, was not found liable by the jury. The jurors also found in favor of the company’s finance chief, Guillaume Hannezo. Messier testified that he did not mislead investors and that Vivendi’s stock price was hurt by various events beyond his control, including a tightening in debt markets. But in 2003, Vivendi agreed to pay $50 million to the Securities and Exchange Commission to settle fraud charges. Messier paid a $1 million fine. In 2003, Vivendi sold the bulk of its Universal properties to General Electric Co., but retained 20% ownership in the newly-formed NBC Universal group. The company recently announced plans to sell its remaining stake in Universal Studios to General Electric for $5.8 billion. Vivendi also owns Universal Music Group, the world’s largest music company.
Source: Los Angeles Times
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