Suits Claim XM Misrepresented Sub Growth, Costs
May 3, 2006 at 12:31 PM (PT)
A shareholder suit alleges that XM SATELLITE RADIO HOLDINGS executives sold their stock at the same time they were allegedly misrepresenting the company's subscriber growth and ability to cut the cost of adding subscribers.
The suit, filed in WASHINGTON federal court by the firm of SCHATZ AND NOBEL, claims that while XM and CEO HUGH PANERO were telling investors that it could hit its goal of 6 million subscribers by year's end without spending more money, the company knew that it would need to spend more due to "competitive factors" (SIRIUS' spending on talent like HOWARD STERN and heavy marketing). It also claims that insiders sold shares of XM stock in advance of the public release of subscriber figures. The law firm is seeking class action status for shareholders of record between JULY 28, 2005 and FEBRUARY 15, 2006.
And another suit seeking class action status against XM and PANERO has been filed on esentially the same grounds by PHILADELPHIA attorney BERNARD GROSS in U.S. District Court for the DISTRICT OF COLUMBIA.