Class Action Lawsuit Filed Against EA

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.

Their stock is going to plummet...

[boingyzain]

SELL SHORT! SELL SHORT!

Re:Their stock is going to plummet...

[Anonymous Coward]

Yeah... great idea.

Let's sue the bastards. That should boost the stock price.

good!

[alatesystems]

Maybe next, they'll get screwed for running their facilities like hard-labor prisons [gamespot.com].

Re:good!

[Rs_Conqueror]

Although I cannot speak for everyone, I doubt that the thousands of slashdotters who have been boycotting EA games as a result of the employee abuse have been helping their stock all that much.

Re:good!

[bigman2003]

This is all assumption...

I doubt that the people who would actually care enough to boycott would have bought EA games in the first place.

I boycotted Martha Stewart's media empire the entire time she was in prison. And I am boycotting Oprah until she gets below 125 pounds...

Same effect- I never would have bought their crap anyway...but I guess it is a fairly easy way to make a 'statement.'

Re:good!

[WWWWolf]

I doubt that the people who would actually care enough to boycott would have bought EA games in the first place.

Good question. I boycott EA right now, but I also have the firm opinion that they used to publish great stuff, but these days publish mostly useless garbage and very, very lame new parts in franchises they've acquired.

It's kind of easy to boycott them when I always expect them to publish their next sacrilegiously awful, generic, or otherwise uninspiring title.

Too bad their marketing actual

Re:good!

[rwven]

I've boycotted them...

Re:good!

[chrish]

I've been "boycotting" EA's stuff for a couple of years now... not because of how they run a development sweatshop, but because they keep releasing crap.

See you in Court EA!

[jericho4.0]

Those bastards said they were getting at least 30 hourse of unpaid work per drone. They've been playing bleeding heart pinko with my money.

Re:See you in Court EA!

[Jackboot]

Wouldn't unfairly underpaying their workers be playing heartless capitalist pig with your money?

Turning a Profit

[guaigean]

You'd think with the amount of free labor they've gotten that they could easily increase profits for their shareholders.

Re:Turning a Profit

[DragonMagic]

Especially since most of it is just changing the number at the end of the sports games.

Much ado...

[MattW]

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% [businessweek.com] 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 ;)

Re:Much ado...

[Swanktastic]

I agree wholeheartedly. Additionally, the only people to lose are the current shareholders who (I know it sounds obvious) own the the company and its assets. Therefore any settlements are simply transfers from one shareholder to another (and the lawyers). Given that in a liquid market, any normal shareholder has the option to sell his shares at any time, ALL shareholders have been mislead, not simply those who bought in a certain window who happen to be represented in the suit. There's no ethical justif

A class-action lawsuit. Wonderful.

[bersl2]

Consumers lose. EA won't lose as badly as it should. A few lawyers walk away with assloads of cash.

Justice will not be served.

Too bad for disclaimers

[Anonymous Coward]

I work in a print shop in the financial district in Toronto and, having printed many financial projections, I can pretty well guarantee that on the second or third page of the document there was a disclaimer stating that the document conained "forward looking statements" that are not intended as financial advice. It would further go on to state that the company (EA in this case) makes no warrenties to the validity of those statements.

At least there should have been something like that, otherwise they're sc

Heh

[Anonymous Coward]

They said Shatz.

Re:Heh

[Chi Hsuan Men]

That's my girlfriend's last name you insensitive clod! Seriously....it is.

Greed

[Anonymous Coward]

ERTS share price on October 22nd, 2004: 44.28
ERTS share price on March 22nd, 2005: 55.15

I hate ERTS as much as the next guy, but these greedy class action lawsuit people really need to invest more of their money in STFU and GTFO.