OPTrust Files Class Action Complaint Against NortelPosted: May 17, 2004
Toronto (May 17, 2004) - The OPSEU Pension Trust (OPTrust), has filed a class action complaint against Nortel Networks Corp., Frank A. Dunn, Douglas C. Beatty and Michael J. Gollogly in the United States District Court for the Southern District of New York.
The complaint claims damages during a class period from April 24, 2003 to
April 27, 2004 (inclusive) due to the defendants' alleged violations of
anti-fraud provisions of U.S. securities laws and because of Nortel's
announcement that it would restate previously reported financial results.
OPTrust has also prepared an application to be named lead plaintiff in this
The class action complaint alleges that, during this period, Nortel and individual defendants acted knowingly or recklessly in issuing false and misleading statements to the investing public concerning Nortel's financial position and performance and that Nortel's stock price was artificially inflated due to that conduct. OPTrust alleges that members of the class, including OPTrust, have sustained damages.
In particular, the complaint alleges, among other things, that the defendants:
- issued false and misleading statements during the class period
- caused artificially inflated or distorted market prices of Nortel stock
- were incented by Nortel's bonus compensation program to report favourable results and that management reaped over $30 million in bonuses.
The complaint seeks to recover damages suffered by investors who
purchased Nortel shares during the class period. OPTrust is also concerned
about the governance procedures at Nortel. Because the members of the class
are so numerous, OPTrust takes the position that a class action lawsuit is
an appropriate way to proceed.
OPTrust is currently the lead plaintiff in an earlier class action lawsuit brought against Nortel. This suit alleges that serious disclosure and accounting irregularities occurred at Nortel between October 24, 2000 and February 15, 2001. This earlier class action has been certified by the courts in New York following Nortel's unsuccessful attempts to have it dismissed. In early April 2004, notice was given to potential class members in Canadian and U.S. newspapers, and through a mailing to known holders of stock.
OPTrust is pursuing its claims as part of its fiduciary responsibility to the members and pensioners of the OPSEU Pension Plan and to recover for losses in its investments. While actively pursuing its recovery of damages, the losses do not affect OPTrust's capacity to meet its pension obligations and pay pensions.
OPTrust's legal action is consistent with its role as a major institutional investor with a long-standing interest in the proper functioning of capital markets. OPTrust supports efforts to ensure full, timely and accurate financial disclosure and a high standard of corporate conduct, in the interests of all investors.
OPSEU Pension Trust
OPSEU Pension Trust