According to the press release, Weatherford and certain of its officers and directors are charged with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that defendants knew or recklessly failed to inform investors that (1) the Company did not properly restate its financial statements from 2007 to 2010; (2) the Company hastily issued its 2010 Form 10-K to give the market the impression that it remedied its material weakness in internal controls over financial reporting of income taxes from 2007 to 2010; and (3) the Company failed to properly document an additional $225 million in adjustments for financial statements from 2007 to 2010.
On February 21, 2012, the Company disclosed for the first time that it was going to adjust approximately $225 million to $250 million to previously reported financial results for the years 2010 and prior in relation to the correction of errors identified with respect to the Company’s accounting for income taxes. This news caused Weatherford stock to drop approximately 13% by the close of the business day.
On July 10, 2012, an Order was issued by the Court appointing lead plaintiff and lead counsel.
On September 14, 2012, a Consolidated Amended Class Action Complaint was filed by the plaintiffs against the defendants.
On September 19, 2013, the Court denied the defendants’ motion to dismiss due to the inference that defendants issued financial statements in reckless disregard for their truth. Moreover, in light of the specific statements each made and the allegations of their close involvement with addressing the Company’s tax problems the complaint was sufficient as to both individual defendants.
On September 29, 2014, the Court issued an Order granting Lead Plaintiffs' Motion for Class Certification.
According to a press release issued on July 1, 2015, there has been a proposed settlement of $120 million in this case.