LAWSUITS NEWS & LEGAL INFORMATION
Insider Trading
Wellington, New Zealand: (Mar-31-08) Thirty investors brought a lawsuit against Tranz Rail, alleging that they suffered losses due to an insider trading scam. The suit claimed that six defendants, including expatriate businessman and former Tranz Rail director David Richwhite, sold a combined 19% of Tranz Rail for about $83 million between February and May 2002. The incident sparked off an investigation by the Securities Commission, which reported that the rail insiders sold shares when they knew of unpublicized financial problems at the company. Other defendants include Michael Beard, former Tranz Rail chief executive, Mark Bloomer, ex-chief financial officer; Carl Ferenbach, former director, and Midavia Rail Investments, which is a Belgium-registered company owned by Richwhite and business partner Sir Michael Fay; and American investment fund Berkshire Fund III.
Sources stated that the parties reached a settlement, in which the defendants agreed to pay the thirty investors close to $17 million. Sources said that this was the first step of the Securities Commission's plan in Australasia's biggest insider trading settlement. Under the terms of the deal, all the defendants settled with the commission, paying a total of $27.7 million. The settlement did not admit any liability. Midavia and Richwhite were the last to settle, paying $20 million. The $27.7 million, which officials state, now totals about $29.5 million due to interest, is being held in a trust account held by Toll New Zealand, formerly Tranz Rail. The commission stated that it will have $2 million of expenses reimbursed, which will go into its litigation fund. The investors will receive a $17 million payout. [STUFF: $17 MILLION TRANZ RAIL PAYOUT TO END 6-YEAR WAIT]
Published on Apr-1-08
Sources stated that the parties reached a settlement, in which the defendants agreed to pay the thirty investors close to $17 million. Sources said that this was the first step of the Securities Commission's plan in Australasia's biggest insider trading settlement. Under the terms of the deal, all the defendants settled with the commission, paying a total of $27.7 million. The settlement did not admit any liability. Midavia and Richwhite were the last to settle, paying $20 million. The $27.7 million, which officials state, now totals about $29.5 million due to interest, is being held in a trust account held by Toll New Zealand, formerly Tranz Rail. The commission stated that it will have $2 million of expenses reimbursed, which will go into its litigation fund. The investors will receive a $17 million payout. [
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