Cendant Corporation Securities Litigation

Background

Cendant Corporation was an American provider of business and consumer services, primarily within the real estate and travel industries. Beginning in April of 1998, Cendant uncovered massive accounting errors which were later revealed to have inflated the company's revenue by $500 million over a period of three years. An audit committee launched an investigation and discovered that former executives had been fraudulently preparing false business statements for several years. When this news hit the market, the market value for the company tumbled from a high of $41 per share to $12. At the time of the news, this accounting scandal was the largest case of accounting fraud in American history.

Procedural History

Soon after news broke out of the scandal, multiple law suits broke out on behalf of investors and other injured parties. Various securities law firms began vying for lead counsel status as outlined in the Private Securities Law Reform Act of 1995 (PSLRA). The original complaint was filed on April 16, 1998 by the California Public Employees Retirement System, the New York State Common Retirement Fund and the New York City Pension Funds.

This lawsuit was settled for $3.2 billion. It remains the third largest securities fraud class action recovery in history.

References

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