Sprint Corp. agreed to pay $131 million to settle shareholder claims that company officials made misleading statements, which artificially inflated stock values.
Skandia Life Insurance Co. and the $16.9 billion West Virginia Investment Management Board, Charleston, were among the investors who reached the settlement in mediation with the telecommunications firm over statements made following Sprint's 2005 acquisition of Nextel Communications, according to papers filed Monday in federal court in Kansas City.
Sprint promised a turnaround plan started in 2006 would improve its operations and the company maintained the strategy was working until the third quarter of 2007, according to the complaint. The share price plunged 25% in January 2008 after Sprint warned subscriber levels, revenue and profitability faced “downward pressure,” according to the complaint.
Sprint officials “continue to deny all charges of wrongdoing,” according to the filing. Fees and expenses of as much as $750,000 will be taken from the settlement fund.
“Sprint has and will continue to operate in complete adherence with all federal securities laws,” a Sprint spokeswoman said in an e-mailed statement. “Nevertheless, our company has reached an agreement to settle this matter to avoid further expense and distraction of this litigation.”
The settlement must be approved by a judge.
Meaghan Kilroy contributed to this story..