A United States District Court judge has dismissed a lawsuit brought against Midway Games by a group of shareholders who had alleged that the company artificially inflated its stock by deceiving the public.
Filed by Joseph Zerger, “on behalf of himself and all others similarly situated,” the suit targeted Midway Games’ Steven Allison, James R. Boyle, Miguel Iribarren, Thomas Powell and David Zucker.
In a filing dated October 19, 2009, Northern District Illinois Eastern Division Judge David Coar ruled against the plaintiffs, stating:
Plaintiffs have failed to show that Defendants said or did anything more than publicly adopt a hopeful posture that its strategic plans would pay off. Such preening for the financial press is classic puffery. Even if these statements were not puffery, Plaintiffs cannot establish that they were false when made.
The plaintiffs had alleged that:
While the executives rushed to sell their Midway stock at the trumped-up prices their “scheme” temporarily sustained, the lead plaintiffs and other putative class members purchased it—and lost millions when the market eventually learned the truth.
Midway declared bankruptcy in February of this year.
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