Plaintiffs in the case, which has been around since 2002, are shareholders across the U.S. and Europe who allege that Vivendi–then known as Vivendi Universal–made false and misleading statements in 2001 and 2002, when Vivendi’s former CEO Jean-Marie Messier was transforming the French water company into a media conglomerate through a mad dash of acquisitions. Plaintiffs claim that Vivendi, Messier, and former chief financial officer Guillaume Hannezo concealed a liquidity crisis, whose revelation ultimately caused the stock to drop.
After denying the defendants’ motion to dismiss, Judge Holwell made the rare decision to certify a class that included investors from France, England, and the Netherlands, as well as the U.S. Earlier this year, he denied a motion for reconsideration of his class certification ruling by the defendants, who argued that French courts would not recognize a U.S. judgment against Vivendi.
The case is being watched closely by the plaintiffs bar, which would like to see more foreign investors file securities suits in U.S. courts. “It has the potential to send a very strong message that U.S. courts will not tolerate and will appropriately punish foreign companies who use the U.S. as a basis for engaging in fraudulent activity,” said William Fredericks of Bernstein Litowitz Berger & Grossmann, who is involved in a similar case against Alstom.