FLAG Telecom Investor Lawsuit Filed

If you purchased the common stock of FLAG Telecom Holdings Limited (“FLAG”) between March 6, 2000 and February 13, 2002 or purchased FLAG common stock pursuant to or traceable to FLAG’s initial public offering (IPO) between February 11, 2000 and May 10, 2000, inclusive, and were damaged thereby and did not sell all of those shares prior to February 13, 2002, then you could get a payment from a class action settlement.

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Company Name(s): 
FLAG Telecom
Case Name: 
FLAG Telecom Shareholder Class Action 04/02/2002
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Case Status: 
Settlement Approved
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
04/02/2002
Class Period Begin: 
03/06/2000
Class Period End: 
02/13/2002
Court of Filing: 
U. S. District Court for the Southern District of New York
Date Settled: 
10/29/2010
Settlement Amount: 
$24,400,000
Deadline to Participate in Settlement: 
11/30/2010
Settlement Notice: 
Settlement Proof: 
Summary: 

JULY 2010 - A class action settlement has been reached in a class action lawsuit pending in the United States District Court for the Southern District of New York against certain directors and officers (the “Individual Defendants”) of FLAG Telecom Holdings Limited (“FLAG”). The Flag Telecom securities class action settlement Defendants agreed to create a $23.8 million settlement fund to be divided, after attorneys’ fees and expenses, among all settlement Class Members, and CGMI agreed to create a $600,000 fund to be divided, after attorneys’ fees and expenses, among all settlement Class Members who purchased FLAG common stock pursuant to or traceable to FLAG’s IPO between February 11, 2000 and May 10, 2000.

MAY 2002 - The original Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between March 23, 2001 and February 13, 2002, thereby artificially inflating the price of FLAG shares. The complaint alleges that throughout the Class Period, FLAG reported strong year-over-year revenue growth. Unbeknownst to investors, however, as alleged in the complaint, FLAG was experiencing diminishing revenue growth. The complaint alleges that in order to create the impression that FLAG was continuing to experience growth, the Company engaged in a series of reciprocal transactions with certain competitors for the purchase and sale of dark fiber optic cable -- the so-called dark fiber swap. The complaint alleges that as a result of these transactions, FLAG artificially inflated its operating results and materially misrepresented its financial results at all relevant times.