The Regents - University of California | Office of The President

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
258. Defendants, and each of them, acting individually and pursuant to a
scheme and conspiracy, directly and indirectly, induced the purchase of, including
the exchange of stock in the June 2001 recapitalization, by the Plaintiff by
circulating or disseminating, in or from California, information to the effect that
WorldCom was a financially stable corporation and falsely reported the profits of
WorldCom for the purpose of inducing Plaintiff to purchase the stock. Defendants
knew or had reason to believe that their statements were false or misleading in
light of the circumstances under which they were made. As a result of the
misrepresentations, Defendants knew that investors would be misled and purchase,
including the exchange in the June 2001 recapitalization, of WorldCom’s stock
based upon false information. Despite this knowledge, Defendants continued to
make the misrepresentations in order to induce investors to purchase WorldCom
stock.
259. Defendants, and each of them, are liable under Corporations Code
Section 25500 for willfully participating in acts or transactions in violation of
Corporations Code Section 25400, and thus are liable to Plaintiff, who purchased
their stock at a price which was affected by Defendants’ acts, for damages
sustained by Plaintiff as a result of such acts or transactions.
260. As a result of the wrongful conduct of Defendants and each of them,
Plaintiff has sustained economic losses and other general and special damages,
including pursuant to Section 25500, the economic damages as measured by the
difference between the price at which Plaintiff “sold” their stock and its true value
in an amount to be determined according to proof at the time of trial.
261. Plaintiff is entitle to an award of prejudgment interest at the legal rate
on their economic damages, pursuant to Section 25500.
WHEREFORE, Plaintiff prays for relief as set forth below.
27
28
85
COMPLAINT