The lawsuits are piling up against Eaton Corp.
WILMINGTON, Del., Aug 08, 2012 (BUSINESS WIRE) -- Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Northern District of Ohio on behalf of all persons or entities that purchased the securities of Eaton Corporation ("Eaton" or the "Company") ETN +0.35% between August 9, 2009 and June 4, 2012 (the "Class Period"), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers and directors (the "Complaint").
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Eaton, an Ohio corporation headquartered in Cleveland, Ohio, is a diversified power management company. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the involvement of Eaton executives in a scheme to improperly influence the Mississippi state court judge in the Company's high-stakes trade secrets lawsuit against Frisby Aerospace, Inc. ("Frisby"), a rival manufacturer. Specifically, the Complaint alleges that the Company had improper, and possibly illegal, contact with the judge assigned to the Frisby litigation, Judge Bobby DeLaughter, through Eaton's counsel, Ed Peters. As a result of defendants' false and misleading statements, the Company's stock traded at artificially inflated prices during the Class Period.
According to the Complaint, the Company filed a lawsuit in 2004 against Frisby and its former President, Jeffrey Frisby, for allegedly stealing Eaton's trade secrets relating to hydraulic pumps, motors, and other products. Shortly before the filing of the lawsuit, six high-level Eaton engineers left Eaton and joined Frisby. According to Eaton, these engineers allegedly stole Eaton's trade secrets.
The lawsuit against Frisby was filed in Hinds County Circuit Court in Mississippi and was assigned to Judge Bobby DeLaughter. The Company then hired Ed Peters, a former Hinds County District Attorney who was Judge DeLaughter's boss when DeLaughter was an Assistant District Attorney. Judge DeLaughter recused himself from the Frisby litigation in January of 2008 after publicly disclosing that he was under investigation by the United States Department of Justice regarding his involvement in a judiciary bribery scheme concerning another local attorney, Richard Scruggs. Ed Peters was later named as the middle man in the scheme between Scruggs and DeLaughter and this raised serious questions about whether Peters had attempted to improperly influence Judge DeLaughter on Eaton's behalf.
In August and September of 2009, Eaton publicly announced that the Company did not attempt to improperly influence Judge DeLaughter in connection with the action against Frisby. However, during the discovery phase of the Frisby litigation, it was revealed that Eaton had improper, and possibly illegal, contacts with Judge DeLaughter through its counsel, Ed Peters. Subsequently, the lawsuit against Frisby was dismissed and Eaton was fined $1.5 million for discovery violations.
After the dismissal of the Frisby lawsuit, Eaton executives were ordered to explain to the court why certain records were not properly turned over in discovery. On May 31, 2012, the Company's executives finally admitted that the Company had failed in its duty to turn over records, including damaging emails. On this news, shares of the Company reacted negatively, closing at $40.24 per share on June 1, 2012, almost a 6% decline from its previous closing price.
If you wish to serve as lead plaintiff, you must move the Court no later than October 2, 2012. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.
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SOURCE: Rigrodsky & Long, P.A.
Posted August 9, 2012 - 8:55 am