SRZ Client Fully Exonerated in Landmark Securities Case
February 4, 2010
The largest federal securities class action ever to go to trial concluded on Jan. 29 in the U.S. District Court for the Southern District of New York, resulting in a jury verdict completely exonerating our client, one of the defendants in the case. In In re Vivendi Universal, S.A. Securities Litigation, the plaintiff class consisted of all non-insider purchasers of shares in Vivendi Universal—the giant media and communications company that includes Universal Music Group (the world’s largest music company)—from Oct. 30, 2000, through Aug. 14, 2002, in the United States, France, the United Kingdom and the Netherlands. The defendants were Vivendi itself; its former CEO Jean-Marie Messier; and SRZ’s client Guillaume Hannezo, Vivendi’s former CFO. The case, which took seven years to get to trial, involved numerous sophisticated accounting, financial reporting and securities law issues.
In this mammoth and complex trial, which lasted almost four months, the plaintiffs claimed that the defendants violated Section 10(b) of the Securities Exchange Act (the “Act”) by making false and misleading statements for the purpose of concealing the company’s true liquidity condition, resulting in a substantial decline in the value of Vivendi’s shares when the “truth” allegedly was revealed to the market. In addition, Mr. Hannezo and Mr. Messier were charged with violating Section 20(a) of the Act, for purported “controlling person” liability for Vivendi’s alleged Section 10(b) violations. Although Vivendi was found to be liable, our trial team, led by litigation partners
Marty Perschetz and
Michael Swartz, persuaded the jury that Mr. Hannezo was not liable for any of the alleged violations and committed no wrongdoing whatsoever.
Prior to the verdict, SRZ won an important interim victory by prevailing on a motion for judgment as a matter of law dismissing all claims against Mr. Hannezo that were based on Vivendi public statements that he did not actually make for public attribution. This decision, under the Supreme Court case of
Central Bank of Denver v. First Interstate Bank of Denver, limited the scope of Mr. Hannezo’s potential liability.
The jury’s verdict in favor of our client represents a unique and important victory for SRZ in a landmark case.