In an opinion today, Judge Cote determined to sanction, in an amount to be determined later, a law firm that brought a class action alleging that AOL repurchased its stock at artificially depressed prices because it knew that it would later sell a portfolio of patents to Microsoft for over $1 billion, thereby boosting AOL’s stock price.  The patents were sold at an auction, but the plaintiffs alleged that the auction was essentially a sham because Microsoft was the predetermined winner.  A critical allegation in the complaint was that AOL’s Tim Armstrong called Microsoft’s Steve Ballmer long before the auction to “close the deal.”  Judge Cote found the allegation entirely unsupported and rejected counsel’s attempt to minimize it:
Continue Reading Judge Cote Sanctions Class Action Law Firm for Unsupported Allegations Against AOL