March 25 Pitney Bowes Inc has won the dismissal of a securities fraud lawsuit accusing it of misleading investors by not disclosing problems in its businesses that in 2007 caused it to miss financial projections for the first time in seven years.
U.S. District Judge Vanessa Bryant in Hartford, Connecticut, said the mail processing equipment company had included appropriate cautionary language in its regulatory statements and on conference calls that warned investors about the risks.
"A company need not be prescient, it need only be aware of its business environment and warn of factors and circumstances present in its business environment which could affect the company's results," she wrote.
Matthew Broder, a Pitney spokesman, said the company is pleased with the decision.
Samuel Rudman, a partner at Robbins Geller Rudman & Dowd representing the plaintiffs, declined to comment.
The lawsuit was filed in October 2009 and led by the Labourers' Pension Fund of Central and Eastern Canada, and sought class-action status.
The plaintiffs alleged that the Stamford, Connecticut-based company and certain executives were aware of adverse factors that were hurting Pitney's financial results, but chose not to disclose those problems and potentially boost financing costs on a $500 million debt offering in September 2007.
Among the alleged problems was declining revenue in its U.S. mailing segment as fewer customers than expected converted to digital from analog mail meters; failure to offer new products to preserve market share; failure to meet internal sales projections; and customer dissatisfaction.
The plaintiffs said the misstatements took place between July and October 2007, when the company reported disappointing results that sent its share price down 15 percent to $39.93 from $46.99 the next day.
In her 77-page decision Friday, Bryant said the plaintiffs "failed to adequately plead that any problem area had already come to pass at the time the statements were made."
The case is NECA-IBEW Health & Welfare Fund v. Pitney Bowes Inc, et al, U.S. District Court, District of Connecticut, No. 09-01740.