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Class Action Lawsuit Filed Against EA

Posted by Zonk on from the insult-to-injury dept.

yakitori writes "Today, the law firm of Schatz & Nobel, P.C. filed a class action lawsuit against Electronic Arts on behalf of shareholders. The complaint basically alleges that EA issued false financial projections to shareholders. Shares have dropped from $66 on March 21 to $53 on March 29." Gamasutra has commentary on the suit as well.

1 of 22 comments (clear)

  1. Much ado... by MattW · · Score: 4, Insightful

    Frankly, these lawsuits are becoming stupidly commonplace. Which is fine, soon companies will warn of every possible danger and predict their own total failure over and over again, just to set the bar low enough that they're guaranteed to cross over.

    Obviously, there are companies which really hide incredibly significant facts, but EA only lowered its estimates by about 10% for the year. And it takes a much smaller change in gross revenues to effect that profit change, since their marginal production cost is fairly low. And, truth be told, they're only being sued over estimates! They switched from one forward-looking estimate to another forward-looking estimate. They haven't even produced an actual earnings number, since the fiscal year in question hasn't even ended yet.

    When it comes down to it, a lot of class action securities lawsuits just amount to extortion... and the law firm in question isn't even the one which filed the case; they're just involved in the class recruitment/lead plaintiff recruitment feeding frenzy:

    [...] To view a copy of the Complaint initiating the class action, which was not filed by Schatz & Nobel [...]

    I'm surprised no one has filed a frivolous lawsuit against Slashdot for its incredible lax editorial process ;)