Feeds

3Com squares class actions with $259m

Admits no blame, but..

  • alert
  • submit to reddit

Build a business case: developing custom apps

3Com has settled two class actions lawsuits springing from the 1997 takeover of US Robotics with a whacking great big cash payout of $259 million.

3Com admits no wrongdoing, but it seems an awful lot to shell out just to get some dissident shareholders off its back.

USR deal-related litigation is not over yet for 3Com- the company is fighting a a case which will reach the courts next year.

The settled lawsuits revolve around allegations of securities fraud and insider trading. 3Com saw its stock value double in the two months leading up to the completion of the $7bn takeover of US Robotics in June 1997. During this time, 3Com execs flogged $200 million worth of shares. Only problem was, USR had had a couple of crap months in April and May 1997, wracking up $160 million in losses.

3Com didn't tell the world until Ocotober of that year, to the outrage of many shareholders who bought in April and May. By keeping schtum, 3Com had artificially - and conveniently for its share-offloading execs, inflated the price of its stock, they argued.

Furthermore, 3Com had misrepresented the state of the modem market, they said.

Let's accept, for one moment, the premise of the investors'case. However, they haven't done too badly if they held onto their 3Com stock. Although, US Robotics turned out to be a lot of a dog, the company did own Palm Computing, a business currently worth $26 bilion, and still owned by 3Com. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.