Arbitron 'Misled Investors' Claims Lawsuit
In the US, an institutional investor has filed a law suit against ratings giant Arbitron, charging the firm with ‘false and misleading statements’ regarding the roll out of its Portable People Meter (PPM) service.
The complaint alleges that between July 19 2007 and November 26 2007 (the ‘class period’), Arbitron failed to disclose that the scheduled implementation of its PPM service was not performing according to internal expectations and that as a result, the company would have to delay its implementation in nine of the planned markets.
Because of this delay, the suit says that Arbitron lacked a reasonable basis for its positive statements about the timing of the implementation, as well as its prospects and future earnings.
During the period, Arbitron re-iterated its guidance that revenue would increase between 5.5% and 7.5% for the full year 2007. In response to this announcement, share price rose more than 12% to $5.46. According to the suit, at this point CEO Stephen Morris and CFO Sean Creamer ‘took advantage of this temporary inflation in the company’s stock’ and sold 154,334 shares, reaping more than $7.7m.
Following the announcement of the delayed PPM roll out, Arbitron stock fell $7.21 per share, or over 14.74%, to close at $41.70 per share.
The suit seeks to recover damages on behalf of those who purchased shares during the class period, and the plaintiff – who is represented by legal firm Coughlin Stoia Geller Rudman & Robbins – has demanded a trial by jury.
Web site: www.arbitron.com .