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Eric Lechtzin

Eric Lechtzin’s Legal Cases

13 total


  • In re Wireless Facilities, Inc. Sec. Litig., Civil No. 04-cv-1589 (S.D. Cal. May 7, 2007)

    Practice Area:
    Securities and investment fraud
    Date:
    May 07, 2007
    Outcome:
    $12 million settlement after defeating defendants' motion to dismiss
    Description:
    Securities fraud class action alleging that Wireless Facilities and its senior officers materially overstated its earings and income in the years 2000-2003 through at least 9 different accounting manipulations, including: (i) failng to accurately reflect on the Company's balance sheet certain accruals pertaining to foreign tax contingencies and certain domestic sales and use tax contingencies; (ii) improperly calculating revenue under two contracts for the same customer, due to improper measurement of progress on the contracts; (iii) improperly recording revenue under the percentage-of-completion method of accounting where it did not have the abilty to make reasonable estimates of the components for which it recognized revenue, a prerequisite for using the percentage-of-completion method ; (iv) improperly recognizing revenue where collectibilty was not probable; (v) improperly failng to take an impairment charge on an investment it had in an unconsolidated affiliate; (vi) failng to record stock-based compensation expense related to stock options that had previously been granted to employees who thereafter terminated their employment with Wireless; (vii) improperly classifying intangible assets as goodwill to avoid taking amortization charges during 2003 in acquiring three privately-held companies; (viii) failng to timely record an impairment charge for goodwill regarding its Mexican subsidiary and (ix) failing to record contingent ear-out as compensation expense in connection with two acquisitions within its Enterprise Network Solutions segment. Wireless stock fell more than 33% when news of its improper accounting was revealed in August 2004.
  • In re Transkaryotic Therapies, Inc. Sec. Litig., 2005 WL 3178162 (D. Mass. 2005)

    Practice Area:
    Securities and investment fraud
    Date:
    Jun 11, 2008
    Outcome:
    $50 million settlement
    Description:
    After five years of hard-fought, contentious litigation, which included defeating defendants' motion to dismiss and prevailing on class certification, successfully secured a $50 million settlement from the Defendants. This amount represents one of largest settlements ever against a biotech company with regard to non-approval of one of its drugs by the U.S. Food and Drug Administration (“FDA”). Specifically, the Plaintiffs alleged that Transkaryotic Therapies, Inc. (“TKT”) and its CEO, Richard Selden, made misrepresentations and nondisclosures of material facts concerning TKT’s prospects for FDA approval of Replagal, TKT’s experimental enzyme replacement therapy for Fabry disease.
  • In re Hemispherx Biopharma, Inc. Litigation, 09-CV-5262-PD (E.D. Pa.)

    Practice Area:
    Securities and investment fraud
    Date:
    Feb 14, 2011
    Outcome:
    $3.6 million settlement achieved after defeating defendants' motion to dismiss Rule 10b-5 claims.
    Description:
    Federal securities fraud class action against pharmaceutical company alleging that defendants knowingly made false statements about the company's new drug application for Ampligen (an experimental drug to treat chronic fatigue syndrome).
  • In re RenaissanceRe Holdings Ltd. Securities Litigation, No. 1:05-CV-6764 (S.D.N.Y.)

    Practice Area:
    Securities and investment fraud
    Date:
    Sep 12, 2007
    Outcome:
    $13.5 million settlement
    Description:
    Federal securities fraud class action alleging that RenRe created a sham reinsurance transaction that had no economic substance and no purpose other than to smooth and defer over $26 million of its earnings from 2001 to 2002 and 2003. In effect, the transaction enabled RenRe to create a "cookie jar" into which it put excess revenue in one good year, to be pulled out in a future year to increase income.
  • In re Van der Moolen Holding N.V. Securities Litigation, No. 1:03-CV-8284 (S.D.N.Y.)

    Practice Area:
    Securities and investment fraud
    Date:
    Nov 11, 2006
    Outcome:
    $8 million settlement
    Description:
    The action arose from the 2003 specialist scandal, in which numerous specialists on the New York Stock Exchange were accused of engaging in front-running or trading ahead of their clients, and interpositioning their trades between buyers and sellers, among other things. The action represents a recovery of over one-third of the damages suffered by the class. Defeated defendants’ motion to dismiss class action complaint alleging violations of federal securities laws (see In re Van der Moolen Holding N.V. Sec. Litig., 405 F. Supp. 2d 388 (S.D.N.Y. 2005).
  • In re TV Azteca S.A. de C.V. Securities Litigation, 04-cv-00546-JES (S.D.N.Y.)

    Practice Area:
    Securities and investment fraud
    Date:
    Jul 19, 2007
    Outcome:
    $1.2 million settlement that, combined with SEC Fair Funds, represented a recovery of nearly 100% damages sustained by the class
    Description:
    Securities fraud class action lawsuit against Spanish-language television production company TV Azteca, alleging that defendants engaged in an elaborate scheme to conceal Chairman/CEO Ricardo Salinas's role in a series of transactions through which he personally profited by $109 million. The suit alleged that Salinas and others caused TV Azteca or Azteca Holdings to file periodic reports with the SEC that did not disclose Salinas's involvement in related party transactions between Unefon, a subsidiary of TV Azteca, and a private entity secretly co-owned by Salinas, called Codisco. In the related party transactions, Salinas purchased from a third party-at a steep discount-approximately $325 million of indebtedness owed by Unefon to the third party. At the time that Salinas purchased the indebtedness, he was aware that Unefon was in negotiations with another large telecom company which would provide substantial cash to Unefon, and enable Unefon to pay off the full amount of the indebtedness that Salinas had purchased at a discount. Only three months later, when Unefon closed the deal with the other telecom company, Salinas profited by $109 million upon Unefon's repayment of the debt at full value. .
  • In re Biolase Technology, Inc. Securities Litigation, No. 8:04-CV-947 (C.D. Cal. July 25, 2006)

    Practice Area:
    Securities and investment fraud
    Outcome:
    $2.95 million settlement
    Description:
    Defeated motion to dismiss claims alleging violations of § 11 of the Securities Act of 1933.
  • Scott Tanne v. Autobytel, Inc., et al, No. CV 04-8987 (C.D. Cal.)

    Practice Area:
    Securities and investment fraud
    Outcome:
    $6.75 million settlement
    Description:
    Securities fraud class action alleging accounting irregularities.
  • In re Global Crossing Access Charge Litigation, No. 04-MD-1630 (S.D.N.Y)

    Practice Area:
    Securities and investment fraud
    Outcome:
    $15 million settlement
    Description:
    Securities fraud class action alleging improper accounting treatment for access charges paid to other telecom companies.
  • Taft v. Ackermans, (KPNQwest Securities Litigation), No. 02-CV-07951 (S.D.N.Y.)

    Practice Area:
    Securities and investment fraud
    Date:
    Feb 01, 2007
    Outcome:
    $15 million settlement
    Description:
    Securities fraud class action alleging that during the Class Period, the Company, KPNQwest’s Executive Vice President and CFO, portrayed KPNQwest as a booming company which was experiencing and would continue to experience rising revenue, even while the telecommunications market in Europe began to collapse under the weight of bandwidth capacity that far outstripped demand. In order to continue portraying KPNQwest as a successful company and maintain their illusion of earnings growth, the Defendant resorted to utilizing misleading accounting practices and “hollow capacity swaps” (also known as “round-tripping”), which provided no commercial benefit other than to artificially inflate the Company’s sales and revenue. This case centers around the Defendant’s failure to disclose the Company’s misleading accounting practices, and Defendant’s material omissions and the dissemination of materially false and misleading statements concerning KPNQwest’s business operations, revenue and earnings. By the end of the Class Period, after KPNQwest’s inability to maintain its inflated revenue numbers was revealed, its stock price dropped 46% in one day.