NEW YORK, June 20, 2012 /PRNewswire/ -- On May 3, 2012, the Rosenfarb Law Firm filed a class action lawsuit ("Complaint") in the United States District Court, Southern District of New York, on behalf of all persons who sold shares of AOL, Inc. ("AOL" or "the "Company") (NYSE: AOL) between August 11, 2011 and April 9, 2012, inclusive (the "Class Period"), against the Company and certain of the Company's officers and directors, alleging securities fraud pursuant to Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder by the SEC.
The case is styled Rosenfarb v. AOL, Inc. et al. (No. 12-CV-3497-DLC). In addition to the Company, the Complaint names AOL Chairman and Chief Executive Officer Tim Armstrong, and AOL Chief Financial Officer and President of AOL Services Arthur T. Minson as defendants (the "Individual Defendants" and, together with AOL, "Defendants"). A copy of the Complaint filed in this action is available from the Court or can be viewed at http://rosenfarblawfirm.com/uploads/AOL_Complaint.pdf .
The Complaint alleges that Defendants made materially false and misleading statements during the Class Period that omitted or failed to disclose that, at the relevant times: a) Defendants had committed to a plan to sell AOL's valuable patent portfolio; b) Defendants had initiated an active program to locate a buyer for the patent portfolio; c) Defendants were actively marketing the patent portfolio; and, d) as a result, Defendants maintained an artificially low price for AOL's securities throughout the Class Period and understated AOL's liquidity and future prospects. The Complaint further alleges that the Company substantially benefitted from concealing material positive information from the market allowing the Company to buy its stock through a repurchasing program at artificially deflated prices during the Class Period.
On April 9, 2012, the Company issued a press release announcing the $1.056 billion sale of its patent portfolio to Microsoft. When the truth of the Company's materially false and misleading statements was revealed to the market, the Company's stock price rose dramatically. The Company's shares soared from $18.42 per share to $26.40 per share, or more than 43% from the closing price on the prior trading day, on very high trading volume of almost 26 million shares.
In ignorance of the false and misleading nature of the statements described in the Complaint, and the alleged deceptive and manipulative devices and contrivances employed by Defendants, plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of AOL securities. Had plaintiff and the other members of the Class known the truth, plaintiff alleges they would not have sold their AOL securities, or would not have sold such securities at the deflated prices that were paid.
Indeed, on June 15, 2012, AOL issued a press release stating that it had closed its $1 billion patent transaction with Microsoft Corp. and that "[a]s previously announced, AOL is committed to returning 100% of the patent proceeds to shareholders. AOL's Board and management team are currently working on determining the most efficient and expedient method to return the proceeds of the patent transaction. AOL expects to provide additional details to all shareholders by the end of this month." Investors who sold their AOL securities prior to the announced transaction will not participate in the distribution of this $1 billion.
If you sold AOL securities during the Class Period, you may request that the Court appoint you as lead plaintiff by July 16, 2012. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain the Rosenfarb Law Firm, or other counsel of your choice, to serve as your counsel in this action.
If you wish to discuss this action or have any questions, please contact the Rosenfarb Law Firm at 825 Third Avenue, New York, New York 10022, by telephone at (855) 255-1100 (Jorge Amador, Esq.), via e-mail at [email protected] or visit our website at www.rosenfarblawfirm.com. All e-mail correspondence should make reference to AOL.
SOURCE Rosenfarb Law Firm