SNC-Lavalin Class Action Lawsuit Possible Settlement – $1 Billion
The amount of the SNC-Lavalin Class Action Lawsuit Settlement could be a whopping $1 billion. This lawsuit is for all those investors whose investments fell because of some revelations on some payments in North Africa. SNC-Lavalin is an engineering and construction company. This company is based in Montreal. You are eligible to take part and get compensation if you bought the companies securities from February 1, 2007 to February 28, 2012. You can also take part if you bought the debentures of the company’s June 2009 prospectus offering.
The reason for the SNC-Lavalin Class Action Lawsuit and subsequent Possible Settlement is because the company and some of the offices and board of directors were at fault because they violated securities law. Apparently the company made payments to people associated with the Gaddafi regime. This was to make sure that they got contracts for projects in Libya. The reason for such a large settlement is because the company’s stock fell more than 20% on February 28, 2012. This happened after the company made an announcement that the board of directors was investigating undocumented payments that were worth $35 million.
During the subsequent investigation, it was found that Pierre Duhaime who is the chief executive office actually paid out more than $56 million to foreign agents. These payments were considered improper payments. The amount is so large that it begs the question of how did the Board not know about this. It seems that the reason that they did not know or did not want to know is because they would be able to deny any knowledge of any wrong doing. Duhaime resigned in March after getting more than $5 million in the next 2 years. The lawsuit has now been certified and it is said that this is the fastest that one has been certified.
So basically SNC-Lavalin violated securities law by not having adequate control and procedures to make sure that there was accurate financial reporting and disclosure. This apparently did not happen. One of the things that was misrepresented was the 2009 prospectus that had $350 million of debentures. It did not have the facts. All the allegations against the company have not yet been proven in court. This settlement is based on 2 different lawsuits that were filed. One was by Lascaris and the second was by Rochon Genova LLP. The two separate lawsuits were merged in the early part of this year.
The trial will actually begin in 2014. It could be settled way before then of course. Damages have been estimated to be between $700 million and $1.1 billion. The lead plaintiff in this case is Brent Gray. Gray is a resident of Surrey, B.C. He actually bought 600 shares at $52.20 per share. This was done in January. When the company stocks fell, it wiped out more than $1.5 billion of market value. The SNC share peaked at $59.97. The people who have been named in the lawsuit include the board of directors of the company – both current and former members. Michael Novak the SNC-Lavalin International chairman has also been named. These were the people who were actually involved in the deceit and improper payments. Others include former CEO Pierre Duhaime and former controller Stephanie Roy. Executive vice president Riadh Ben Aissa has also been named. Those who have either left the company or have lost their jobs include Duhaime as mentioned earlier, Roy and Ben Aissa. In fact Ben Aissa is in a Swiss jail for fraud and money laundering. Justice has been served.
The company itself and the other defendants did not actually oppose the motion to certify the claim. The company of course has denied all the allegations. The company plans to defend itself. In fact, the company will pay $250,000 to send out the notice of the claim. This is also for the fees for the plaintiffs two experts. The $56 million that was paid out has apparently disappeared. The company is blaming the former vice president Riadh Ben Aissa for the troubles that the company faces. Mr. Ben Aissa has actually denied that he did anything wrong. An investigation has been launched the SNC offices have been searched. The company has stated that it is co-operating with all the investigations that are going on.
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