Feeds

Judge bins lawsuit alleging AOL patent sale conspiracy theory

Court rules that $1bn flogoff to Microsoft wasn't a secret deal

Seven Steps to Software Security

A US judge has dismissed a case against AOL and some of its top execs over their repurchase of millions of shares in 2011 without letting on that the company was planning to sell a $1bn patent portfolio to Microsoft.

A shareholder had sued AOL, its chief exec Tim Armstrong and CFO Arthur Minson, saying that they knew about the planned sale long before it was announced publicly and bought back 14.8 million shares of its own stock.

Once the patent portfolio sale was outed, AOL's stock shot up 43 per cent in a day. The plaintiff alleged, on behalf of herself and other shareholders, that they suffered significant losses from selling stock ahead of the sale because the share price was "artificially deflated by defendants’ failure to disclose information about the patent sale and misleading statements that implied that no such sale was imminent".

But Judge Denise Cote said that her "conspiracy theory" was just speculation, based on rumours on a technology blog. She pointed out that the value of the patent portfolio was well known, as was the fact that AOL was looking for a buyer, so the only way that fraud could have been committed is if the defendants knew the exact terms of the deal ahead of time.

"The facts in the Complaint are simply not sufficient to support the belief that AOL and Microsoft reached a secret deal for the patent portfolio and jointly orchestrated a sham auction to cover up the $1 billion transaction so that AOL could repurchase a portion of its own stock," the judge said in her decision.

Cote said that the blog post didn't cite any source for its speculation so couldn't be used as evidence of a secret agreement. The plaintiff did not have sufficient other evidence to back up the idea that Microsoft and AOL had already signed a deal. ®

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
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.
Mobile application security vulnerability report
The alarming realities regarding the sheer number of applications vulnerable to attack, and the most common and easily addressable vulnerability errors.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.