Case Page

 

Case Status:    DISMISSED    
On or around 01/29/2008 (Court's order of dismissal)

Filing Date: June 13, 2002

The original complaint alleges that Omnicom and certain of its officers and directors violated the federal securities laws. Specifically, the complaint alleges, among other things, that during the Class Period defendants reported that Omnicom was experiencing growth in its revenues and earnings, despite the overall economic slowdown and the worst decline in advertising revenue that the industry had ever experienced. Defendants attributed Omnicom’s growth to, for the most part, the numerous acquisitions made by the Company.

During 2000 and 2001, Omnicom acquired 73 companies. Omnicom, however, failed to reveal that it strung out the payments on its acquisitions for years to come, yet immediately accounted for the revenue from the acquired companies, thereby pumping up the Omnicom’s organic growth rate. During the Class Period, the Company failed to disclose $250 to $350 million in liabilities created by having to make future payments on its acquisitions. Moreover, Omnicom accounted for “earn-out payments” (payments to the acquired companies) as acquisition expenses, rather than compensation, so that the amounts were not subtracted from the Company’s net income.

The plaintiffs further allege that during the Class Period, Omnicom failed to disclose that under certain circumstances, it would be obligated to purchase certain companies in which it had invested. Thereby, Omnicom misrepresented its liabilities. Omnicom also failed to disclose that it transferred its holdings in several troubled internet companies to Seneca, a company it created, so that it would avoid writing down the losses on the investments. Omnicom’s consideration for the transfers was $280 million in Seneca stock, which constituted an overstatement of the value of the investments. As a result of Defendants’ false and misleading statements, Omnicom securities traded at artificially inflated levels during the class period.

According to the Company’s FORM 10-K for fiscal year ended December 31, 2007, beginning on June 13, 2002, several putative class actions were filed against us and certain senior executives in the United States District Court for the Southern District of New York. The actions have since been consolidated under the caption In re Omnicom Group Inc. Securities Litigation, No. 02-CV-4483 (RCC), on behalf of a proposed class of purchasers of our common stock between February 20, 2001 and June 11, 2002. The consolidated complaint alleges, among other things, that our public filings and other public statements during that period contained false and misleading statements or omitted to state material information relating to (1) our calculation of the organic growth component of period-to-period revenue growth, (2) our valuation of and accounting for certain internet investments made by our Communicade Group (“Communicade”), which we contributed to Seneca Investments LLC (“Seneca”) in 2001, and (3) the existence and amount of certain contingent future obligations in respect of acquisitions. The complaint seeks an unspecified amount of compensatory damages plus costs and attorneys’ fees. Defendants moved to dismiss the complaint and on March 28, 2005, the court dismissed portions (1) and (3) of the complaint detailed above. The court’s decision denying the defendants’ motion to dismiss the remainder of the complaint did not address the ultimate merits of the case, but only the sufficiency of the pleading. Defendants have answered the complaint. Discovery concluded in the second quarter of 2007. On April 30, 2007, the court granted plaintiff’s motion for class certification, certifying the class proposed by plaintiffs. In the third quarter of 2007 defendants filed a motion for summary judgment on plaintiff’s remaining claim. On January 28, 2008, the court granted defendants’ motion in its entirety, dismissing all claims and directing the court to close the case. On February 4, 2008, the plaintiffs filed a notice of intent to appeal that decision to the United States Court of Appeals for the Second Circuit.

According to an article dated March 9, 2010, a federal appeals court has upheld the dismissal of a securities fraud class action alleging that marketing and advertising holding company Omnicom Group Inc. and its senior officers fraudulently manipulated financial statements to stave off losses stemming from soured investments in Internet companies. On Tuesday, the U.S. Court of Appeals for the Second Circuit handed down an opinion affirming the U.S. District Court for the Southern District of New York's Jan. 29, 2008.

COMPANY INFORMATION:

Sector: Services
Industry: Advertising
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: OMC
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 02-CV-04483
JUDGE: Hon. Richard C. Casey
DATE FILED: 06/13/2002
CLASS PERIOD START: 04/25/2000
CLASS PERIOD END: 06/11/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller, Bowman Coates & Rudman, LLP (Boca Raton, FL)
    One Boca Place. 2255 Glades Road, Suite 421A, Cauley Geller, Bowman Coates & Rudman, LLP (Boca Raton, FL), FL 33431
    561.750.3000 561.750.3364 ·
  2. Kaplan Fox & Kilsheimer, LLP (former New York, NY)
    805 Third Avenue, 22nd Floor, Kaplan Fox & Kilsheimer, LLP (former New York, NY), NY 10022
    212.687.1980 212.687.7714 · info@kaplanfox.com
  3. Law Offices of Bernard M. Gross (Philadelphia) (former)
    1515 Locust Street, 2nd Floor, Law Offices of Bernard M. Gross (Philadelphia) (former), PA 19102
    215-561-3600 215-561-3000 · bmgross@bernardmgross.com
  4. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  5. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  6. Much Shelist Freed Denenberg Ament & Rubenstein, PC

    800-470-6824 312-621-1750 ·
  7. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 02-CV-04483
JUDGE: Hon. Richard C. Casey
DATE FILED: 05/19/2003
CLASS PERIOD START: 02/20/2001
CLASS PERIOD END: 06/11/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  2. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
  3. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
  4. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  5. Wechsler, Harwood, Halebian & Feffer, LLP
    488 Madison Avenue, Wechsler, Harwood, Halebian & Feffer, LLP, NY
    212.935.7400 10022 ·
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