A class-action securities lawsuit against Arbitron and its executives is about to come to an end. Arbitron disclosed in an SEC filing that it has reached a settlement of the lawsuit filed in 2008 claiming that the ratings company misled investors about the commercialization of its Portable People Meter (PPM) service.
The Plumbers and Pipefitters Local Union No. 630 Pension-Annuity Trust Fund had filed the lawsuit in April 2008 in the US District Court in Manhattan. The action sought class-action status to represent all purchasers of Arbitron common stock between July 19, 2007, and November 26, 2007. That class-action status was granted in September 2011.
The original lawsuit had claimed that Arbitron, former CEO Steve Morris and former CFO Sean Creamer, currently COO, had violated federal securities laws. “The plaintiff alleges misrepresentations and omissions relating, among other things, to the delay in commercialization of our PPM ratings service in November 2007, as well as stock sales during the period by company insiders who were not named as defendants and Messrs. Morris and Creamer,” Arbitron said in a summary of the suit. Creamer was dismissed as a defendant in 2010, but the court rejected motions by Arbitron and Morris to dismiss the lawsuit completely.
As a result of mediation, a settlement was reached last month under which Arbitron and its insurers agreed to settle the case for $7 million, which will be funded by insurance. US District Judge Paul Engelmayer conducted a telephone conference regarding the proposed settlement on March 7th.
“Because this is a class action, settlements of this type are subject to preliminary and final review by the Court with an opportunity for class members to respond to the proposed settlement and object if they so desire. That process typically takes 4-5 months and has not yet begun,” Arbitron noted in its SEC filing.
A derivative lawsuit, Pace v. Morris, et al, remains pending in a New York state court, making essentially the same claims against Arbitron.