Peoplesoft has been peppered with class action lawsuits, which allege malpractice and misrepresentation in handling the spin off of its Momentum research and development arm and in its acquisitions of Intrepid and Pman.
The move follows the enterprise resource applications supplier?s announcement at the end of last month that its fourth quarter figures were below analysts? expectations and that it intended to axe six per cent of its workforce.
The firm also said it did not expect to return to significant growth until the second half of this fiscal year (see VNU Newswire, 29 January, 1999).
In his lawsuit, litigant, Dennis J Johnson ties the Intrepid and Momentum deals to forecasts, subsequent results, and insider trades.
Johnson also alleges that Peoplesoft executives sold out at a time when they knew the share price could be adversely affected, but made substantial profits in the process.
Barrack, Rodos and Bacine, on the other hand, allege that insiders benefited to the tune of $232 million in share sales during the period covered by the lawsuits.
The suit claims that Dave Duffield, PeopleSoft?s chief executive, benefited either directly or indirectly to the tune of $162.4 million, while his brother Al netted $12.8 million despite knowing the company?s performance would decline.
A further claim alleges that Cyril Yousani, a PeopleSoft board member, who was at Informix when it was implicated in a $300 million accounting irregularity, also benefited from share dealing.
(see analysis section for further details)
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