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Regulation

Five-Year-Old Lawsuit Against VeriFone Brought Back to Court

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A U.S. appeals court has reversed the dismissal of a shareholder class action brought against VeriFone in the wake of its 2007 earnings restatement of three quarters from that year, the company stated in a Securities and Exchange Commission filing

The 9th U.S. Circuit Court of Appeals in San Francisco made the decision. The case was originally put to bed by a lower court in March 2011. Reuters reported the news last week. 

In 2007, the restatement sent VeriFone's stock and market value tumbling.

A 152-page deposition that VeriFone CEO Douglas Bergeron voluntarily gave to the SEC shows that SEC attorneys confronted Bergeron with a cache of emails relating to his involvement in discussions about the company's financial reporting prior to the erroneous statements. 

At the time, VeriFone expected to earn 36.5 cents a share for a period that was not specified in the transcript. In a separate and unrelated email, Bergeron told colleagues that if the company didn't hit a certain number, "the party would be over big time for us," according to messages cited in the deposition.

In 2009, the SEC came to a settlement with VeriFone. VeriFone's chief financial officer, Barry Zwarenstein, resigned. Bergeron relinquished the chairmanship shortly after the episode.

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