ValueClick Strikes $10M Deal In Securities Action

ValueClick Strikes $10M Deal In Securities Action - 6/15/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

ValueClick Strikes $10M Deal In Securities Action
Jocelyn Allison

Securities Law 360. June 15, 2009
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EXCERPT: ValueClick Inc. has agreed to pay $10 million to settle a putative securities class action accusing the online advertiser of inflating its stock price by failing to disclose illegal marketing practices in one of its divisions. The settlement, if approved, would resolve allegations that the Westlake Village, Calif.-based company tricked Internet users into signing up for false promotions as a way to generate sales leads for its customers and, in turn, grow its own stock price. The parties have asked the court to grant preliminary approval for the settlement and certify a class of investors who purchased ValueClick common stock from June 2005 to July 2007, according to a settlement motion filed Friday in the U.S. District Court for the Central District of California. Investors first filed suit against ValueClick in August 2007, about three months after the company revealed that the Federal Trade Commission was investigating its practices. ValueClick Executive Chairman James R. Zarley and former Chief Administrative Officer Samuel J. Paisley are also named as defendants. According to the plaintiffs, ValueClick violated federal securities laws by claiming that it was compliant with state and federal regulations governing its business, while in fact it was relying on illegal methods to generate leads for its customers. The company allegedly used pop-up ads promising Internet users free gifts if they completed forms disclosing their personal information, then required them to make purchases first in violation of federal law. The plaintiffs claim that ValueClick would entice users to sign up for contests promising a new car or college scholarship, but would never actually award any prizes, instead using the allegedly fake contest as a way to obtain their personal information.

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