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Case Status:    DISMISSED    
On or around 03/28/2007 (Date of order of final judgment)

Filing Date: May 01, 2006

According to a press release dated March 29, 2007, a federal judge Thursday dismissed a class action lawsuit alleging securities fraud against XM Satellite Radio Holdings Inc. Judge Ellen Segal Huvelle of the U.S. District Court for the District of Columbia said the suit, filed in May 2006, 'failed to identify any materially misleading statements or omissions' by the company that would support a lawsuit. A group of XM shareholders argued in the suit that the company's stock price in early 2006 was largely based on the number of its subscribers and its marketing costs for attracting those subscribers. The suit charged that XM executives predicted in mid-2005 that their marketing costs for acquiring new subscribers would decline or stabilize. When XM disclosed in February 2006 that its marketing expenses had significantly increased, its shares dropped almost 28.5 percent, the shareholders' complaint said. The investors sought to recover financial losses they incurred for stock or stock options purchased between July 28, 2005 and Feb. 16, 2006. But Huvelle ruled that the company's projections of its marketing costs were 'forward-looking statements...accompanied by meaningful cautionary language' and therefore shielded from lawsuits. The plaintiffs also failed to show that the company's statements 'lacked a reasonable basis when made,' Huvelle wrote.

On August 1, 2006, the Court entered the Memorandum Opinion and Order signed by U.S. District Judge Ellen S. Huvelle granting the motion to appoint lead plaintiffs. On September 26, 2006, a Consolidated Class Action Complaint was filed. On November 14, 2006, the defendants filed a motion to dismiss the Consolidated Class Action Complaint.

The original Complaint alleges that defendants violated federal securities laws by issuing a series of materially false statements. Specifically, defendants made misrepresentations regarding XM's ability to reduce the costs of its new subscribers as it reached its goal of 6 million subscribers by year end 2005. In reality, XM would be forced to spend extraordinarily large sums of money in the fourth quarter of 2005, in order to stay on track to achieve its stated goal. Despite defendants' knowledge that XM would be making those huge expenditures in the fourth quarter of 2005, defendants failed to disclose to the market that XM's cost of subscriber acquisition would rise to extraordinary levels, leading to huge increases in XM's net losses, which was in complete reversal of the trends of declining subscriber acquisition costs and net losses defendants were reporting. During the Class Period, several key insiders of XM made huge sales of their personal taking advantage of the artificial inflation of XM's common stock.

The complaint further alleges that on or around February 16, 2006, defendants issued a press release announcing XM's results for the fourth quarter 2005 and year 2005 results. In the release, they disclosed the truth about the skyrocketing level of XM's subscriber acquisition costs. On this news, XM's common stock fell 13% to close at $21.96 on February 17, 2006.

COMPANY INFORMATION:

Sector: Services
Industry: Broadcasting & Cable TV
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: XMSR
Company Market: NASDAQ
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: D. District Columbia
DOCKET #: 06-CV-00802
JUDGE: Hon. Ellen S. Huvelle
DATE FILED: 05/01/2006
CLASS PERIOD START: 07/28/2005
CLASS PERIOD END: 02/15/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC)
    1100 New York Avenue, N.W., Suite 500, West Tower, Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC), DC 20005
    202.408.4600 202.408.4699 · lawinfo@cmht.com
  2. 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
No Document Title Filing Date
COURT: D. District Columbia
DOCKET #: 06-CV-00802
JUDGE: Hon. Ellen S. Huvelle
DATE FILED: 09/26/2006
CLASS PERIOD START: 07/28/2005
CLASS PERIOD END: 02/16/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton)
    197 South Federal Highway, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton), FL 33432
    561.750.3000 56.750.3364 · info@lerachlaw.com
  2. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (D.C.)
    1100 Connecticut Avenue, N.W., Suite 730, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (D.C.), DC 20036
    202.822.6762 202.828.8528 · info@lerachlaw.com
  3. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    58 South Service Road, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
No Document Title Filing Date
No Document Title Filing Date