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Case Status:    SETTLED
On or around 06/04/2018 (Date of order of final judgment)

Filing Date: June 03, 2002

The original complaint charges that Halliburton violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between July 22, 1999 and May 28, 2002. As alleged in the complaint, beginning in the fourth quarter of 1998, unbeknownst to the public, Halliburton materially changed its revenue recognition policy to recognize revenue on claims and change orders relating to cost-overruns which its clients had not approved. Previously, the Company would only recognize revenue on approved change orders or claims.

The Complaint further alleges that the alteration of the Company's accounting policy and financial results reported as a result thereof throughout the Class Period were materially false and misleading and in violation of Generally Accepted Accounting Principles ("GAAP") because, among other things, the accounting change was not disclosed to the public or supported as the preferred accounting treatment in the Company's financial statements and because collection of the claims or change orders was not probable and the amounts involved could not be estimated reliably. As a result of these violations of GAAP, according to the complaint, the Company's quarterly and annual earnings press releases and financial reports filed with the Securities and Exchange Commission ("SEC") throughout the Class Period were materially false and misleading and artificially inflated the Company's reported revenues and earnings, thereby artificially inflating the price of Halliburton securities. On May 28, 2002, after the close of the market, Halliburton issued a press release announcing that the SEC is conducting an investigation into its accounting for cost overruns. In reaction to the press release, the price of Halliburton common stock dropped by 3.3% in one day on extremely heavy trading volume.

According to a Press Release dated May 30, 2003, Halliburton and plaintiffs' representatives have signed a memorandum of understanding to settle approximately twenty shareholder class action securities cases that have been consolidated before a federal court in Dallas, Texas, and a shareholder derivative suit pending in the same federal court. A second derivative lawsuit filed in the District Court of Harris County, Texas, has been dismissed by the court without prejudice. The memorandum of understanding has been executed by the plaintiffs' lead counsel, who has authority on behalf of all plaintiffs in the class actions to negotiate settlements, and also by the plaintiff's counsel in the derivative action. Three of the four lead plaintiffs in the securities actions have agreed to the settlement terms and the fourth is evaluating the matter. All of the cases initially arose out of questions regarding Halliburton's accounting for revenues associated with unapproved claims and change orders on long term fixed price construction projects. The memorandum of understanding more broadly covers all claims, however denominated, arising out of a purchase of Halliburton stock during the class period of May 18, 1998 through May 28, 2002 and all derivative claims that could have been asserted against the defendants for any acts, facts, transactions, occurrences, representations or omissions during the class period in connection with, arising out of, or in any way related to the allegations in the complaints filed in the securities or derivative actions.

As reported by the Company’s FORM 10-Q for the quarterly period ended June 30, 2005, on June 7, 2004, the court entered an order preliminarily approving the settlement. Following the transfer of the case(s) to another district judge and a final hearing on the fairness of the settlement, on September 9, 2004, the court entered an order holding that evidence of the settlement’s fairness was inadequate and denying the motion for final approval of the settlement in the Moore class action and ordering the parties, among other things, to mediate. After the court’s denial of the motion to approve the settlement, the Company withdrew from the settlement as it believes it is entitled to do by its terms, although the settling plaintiffs assert otherwise. In the days preceding the mediation, two union-sponsored pension funds filed motions seeking leave to intervene in the consolidated class action litigation and to file their own class action complaint. The court has granted those motions. The mediation was held on January 27, 2005 and, at the conclusion of that day, was declared by the mediator to be at an impasse with no settlement having been reached.

After the mediation, the lead plaintiff and lead counsel filed motions to withdraw as lead plaintiff and lead counsel. The court conducted a hearing on those motions on April 29, 2005. At that hearing the court appointed co-lead counsel and directed that they file a third consolidated amended complaint not later than May 9, 2005 and that the Company file its motion to dismiss not later than June 8, 2005. That motion has now been filed and fully briefed. The court has set a hearing on that motion for August 2, 2005.

On September 9, 2004, the court ordered that if no objections to the settlement of the derivative action described above were made by October 20, 2004, the court would finally approve the derivative action settlement. On February 18, 2005, the court entered an order dismissing the derivative action with prejudice.

According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, in April 2005, the court appointed new co-lead counsel and a new lead plaintiff, directed that they file a third consolidated amended complaint, and that the Company file its motion to dismiss. The court held oral arguments on that motion in August 2005, at which time the court took the motion under advisement. On March 14, 2006, the court entered an order in which it granted the motion to dismiss with respect to claims arising prior to June 1999 and granted the motion with respect to certain other claims while permitting the plaintiffs to replead those claims to correct deficiencies in their earlier complaint. With respect to those issues regarding which the court denied the motion, the Company has requested that the court certify its order for interlocutory appeal. On April 4, 2006, the plaintiffs filed their fourth amended consolidated complaint. The Company intends to renew its motion to dismiss those portions of the complaint that have been replead.

According to an article dated February 26, 2007, U.S. District Judge Barbara Lynn of Dallas granted the request of lead plaintiff Archdiocese of Milwaukee Supporting Fund to replace Lerach Coughlin Stoia Geller Rudman & Robbins with Boies Schiller & Flexner, the firm of renowned litigator David Boies. Representatives of the AMS Fund had cited Lerach's ongoing criminal investigation as an important factor among several that had led to the "deterioration" of its relationship with Lerach. (Judge Lynn also removed Lerach's co-lead counsel, Scott + Scott. Though the AMS Fund had originally asked Scott + Scott to help it seek Lerach's removal, the firm had refused and sided with Lerach instead. The AMS Fund then asked for Scott + Scott to be tossed, too.) In removing Lerach Coughlin as lead counsel, Judge Lynn wrote, she was not intimating that Lerach or his firm had done "anything unethical, immoral, or otherwise improper." She was merely recognizing, rather, that the lead plaintiff AMS Fund's relationship with his firm was "no longer productive."

On February 23, 2007 Judge Barbara M. G. Lynn signed an order denying the Plaintiff's motion to strike certain exhibits from discovery. On March 28, 2007 Judge Barbara M. G. Lynn signed an order dismissing the lawsuit as to certain individuals and denying the motion to dismiss as to Halliburton.

On August 6, 2007, the judge scheduled the case for jury trial to commence in July 2009. In the meantime, discovery continues and the judge denied motions for class certification on September 29, 2008. The plaintiffs have filed an appeal on the order denying class certification. The case will remain stayed in the district court pending the outcome of the appeal.

On March 11, 2010, the Court entered the certified copy of the Opinion from the U.S. Court of Appeal. According to the Opinion, the District Court's judgment denying the Plaintiff's motion for class certification is affirmed. The action has been stayed.

According to the Company's Form 10K for the fiscal year ended December 31, 2010, on May 13, 2010, AMSF filed a writ of certiorari in the United States Supreme Court. In early January 2011, the Supreme Court granted AMSF’s writ of certiorari and accepted the appeal. The parties will now submit legal briefs to the Court and the Court will hear oral arguments in April 2011. The appeal is limited to review of the legal ruling of the Fifth Circuit affirming the lower court’s order denying class certification and will not include review of the facts of the underlying lawsuit.

According to an article dated June 6, 2011, removing a significant hurdle for plaintiffs in securities class actions, the Supreme Court ruled Monday that investors need not prove at the class certification stage that a company's deceptive conduct caused their economic losses. The Court struck down a ruling by the U.S. Court of Appeals for the 5th Circuit that said so-called "loss causation" had to be proven before investors can proceed as a class. The ruling in Erica P. John Fund Co. v. Halliburton was unanimous, and came just six weeks after the case was argued. ... The case was brought against Halliburton under Section 10(b) of the Securities Exchange Act, claiming that company executives made misrepresentations about its future revenues and its exposure to asbestos lawsuits, all aimed at inflating its stock price. But the district court and the 5th Circuit kept the suit from proceeding because plaintiffs had not proven a connection between the misrepresentation and their losses. The 5th Circuit said that proof was needed to trigger the "fraud on the market" presumption that investors relied on the misrepresentations in buying or selling stocks. But the high court, in an opinion written by Chief Justice John Roberts Jr., said the two concepts were unrelated. "Loss causation addresses a matter different from whether an investor relied on a misrepresentation, presumptively or otherwise, when buying or selling a stock," Roberts wrote.

On July 25, 2011, the Court entered the Judgment and Mandate of the U.S. Court of Appeals, reversing the district court's judgment and remanding the action to the district court for further proceedings or decision.

On June 4, 2012, the Court issued an Order granting the Parties' Joint Motion for a Stay Pending Ruling on Defendants' Appeal. This matter is stayed until the Fifth Circuit has issued a final order resolving the interlocutory appeal.

On August 7, 2013, the Fifth Circuit issued a Judgment affirming the decision of the District Court.

On November 20, 2013, the Supreme Court of the United States entered an Order granting the petition for a writ of certiorari. Arguments are scheduled for March of 2014.

On June 23, 2014, the U.S. Supreme Court declined to overturn the Basic v. Levinson decision, but ruled that securities defendants would be allowed to rebut the fraud-on-the-market presumption before the class certification stage by showing a lack of price impact.

On December 23, 2016, the media reported a Settlement has been reached in this case for the amount of $100 million. The Parties entered into a Stipulation of Settlement on February 21, 2017. On March 31, the Court issued an Order preliminarily approving the Settlement. On April 25, 2018, the Court issued an Order granting final approval of the Settlement. On June 4, the Court entered Final Judgment and dismissed the case with prejudice.

On July 31, 2018, the Court issued an Order granting distribution of the net Settlement fund. On February 15, 2022, the Court issued an Order approving distribution of the remainder of the net Settlement fund.

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