Shareholder Suit Against XM Dismissed
March 30, 2007 at 5:45 AM (PT)
A shareholder lawsuit against XM SATELLITE RADIO has been dismissed in federal court. Judge ELLEN SEGAL HUVELLE of the U.S. District Court for DC dismissed the securities fraud lawsuit filed by a group of XM shareholders, saying that the MAY 2006 suit did not identify any materially misleading statements or omissions by the company.
The shareholders had argued that XM executives had said that marketing costs would remain flat or go down, but the company then disclosed sharply higher marketing costs in JANUARY 2006. The judge noted that the forward-looking statements were properly disclaimed and the plaintiffs had not shown that the statements did not have a reasonable basis when made.