Jan 29 A group of shareholders suing Weatherford
International Ltd for alleged securities law violations
have notified a United States federal court that they have
agreed on preliminary settlement terms with the oil services
Weatherford has agreed to pay $52.5 million to the American
Federation of Musicians and Employers' Pension Fund (AFME), the
Georgia Firefighters' Pension fund and other shareholders to
settle the case after three years of litigation, according to a
Wednesday filing in the U.S. District Court for the Southern
District of New York.
The case began when Weatherford announced in March 2011 that
a "weakness in internal control" had caused the company to
understate its tax expenses from 2007 to 2010 by more than $500
AFME, one of the largest pension funds in the entertainment
industry, filed a lawsuit against Weatherford and its directors,
alleging that the omission was a knowingly false statement
prohibited by the Securities and Exchange Act.
The pension fund alleged that through "a simple and crude
tax accounting fraud", Weatherford's tax expenses dropped
sharply in 2007, leading to improved analyst assessments.
A Weatherford representative was not immediately available
to comment on the terms of the proposed settlement, which will
need the approval of a federal judge.
The securities settlement follows the November announcement
that Weatherford would pay $253 million in fines to the U.S.
government to settle unrelated allegations that it had violated
the Foreign Corrupt Practices Act (FCPA) and export laws.
The U.S. government had charged Weatherford with exporting
oil and gas equipment to Iran, Syria, Sudan and Cuba in
violation of sanctions, and exporting items controlled for
nuclear non-proliferation reasons to Venezuela and Mexico.