The Supreme Court has agreed to hear an appeal by shareholders who hold stock in Halliburton but the Supreme Court will not be deciding on the merits of the case. Rather, it will decide whether or not the lawsuit can proceed as a class action. In other words, once the Supreme Court makes its ruling in this case, then the lawsuit itself will move ahead.
The lawsuit alleges that Halliburton artificially inflated stock price by understating liability for asbestos litigation, inflating profits from construction and engineering units and overstating the benefits of a merger. The lawsuit was filed in 2007 and claims that once Halliburton made corrections, its stock price fell.
An appeals court ruled that the evidence did not show that Halliburton's alleged misrepresentations had any impact on stock price and denied the lawsuit class-action status.
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Meanwhile, the New York comptroller has settled a securities fraud lawsuit filed against Merrill Lynch & Co. and two former Merrill Lynch officials. The lawsuit, which was settled for $4.25 million, was filed on behalf of the New York State Common Retirement Fund. The comptroller alleged that the New York State Common Retirement Fund was misled about Merrill Lynch's participation in the subprime mortgage crisis.
According to The Wall Street Journal, the comptroller alleged that the cover-up artificially inflated the value of the company's stock, which dropped drastically once the true nature of Merrill Lynch's participation in the subprime mortgage crisis became known.