Investor suit vs. JDS Uniphase opens
Despite several attempts on the part of U.S. District Judge Claudia Wilken, the two sides failed to reach the kind of settlement that usually ends such cases. Instead, the case is on the verge of becoming one of the few securities litigation cases to go to trial.
"We look forward to the opportunity to have our case heard," said Terri Garland, an attorney representing JDS Uniphase.
Starting in 1999, JDS became the leading fiber-optic company as it used its skyrocketing stock to acquire 11 rivals. But in February 2001, the company imploded.
Executives insist they never saw the collapse coming and were simply caught up in a wave that hit the entire telecommunications industry. The Connecticut state treasurer's office, led by Denise Nappier, sued the company on behalf of all shareholders alleging that insiders knew for almost a year that the company was in trouble, but hid the truth to give themselves more time to sell stock and acquire other companies.
Connecticut's state employee pension fund lost $65 million on JDS stock compared with just $17 million on Enron.
Besides JDS, the Connecticut lawsuit names former CEOs Jozef Straus and Kevin Kalkhoven (Champ Car), former President Charles Abbe and former Chief Financial Officer Anthony Muller.
Jury selection and opening statements are scheduled for today. Including Monday, the trial is scheduled to last 19 days. The judge said she expects the trial and closing statements to wrap up before Thanksgiving and that the jury would be deliberating after the holiday weekend.
That tight timeline for such a complex trial was the source of much of the squabbling between attorneys Monday. But despite some pleas for more time, the judge held fast to the schedule.
"I'm sure we could spend a year on this case without repeating ourselves," Wilken said. San Jose Mercury News (Related article)