Federated-Fingerhut Securities Fraud Case DismissedA class-action securities fraud case filed against Federated Department Stores Inc. related to its acquisition of Fingerhut Cos. was dismissed by a U.S. District Court judge, a Cincinnati newspaper reported yesterday.
In 1999, Cincinnati-based Federated acquired value-priced cataloger Fingerhut. The latter's financial burdens proved more than Federated bargained for, and three years later it laid off thousands of workers and sold Fingerhut's catalog operations.
The suit -- brought by Federated investors who bought the company's stock between Feb. 23 and July 20, 2000 -- claimed Federated and its executives ignored Fingerhut's problems and overstated its financials, the Cincinnati Business Courier said.
In a March 25 decision, Judge Richard Conway Casey of U.S. District Court of the Southern District of New York ruled that the shareholders failed to prove Federated's intent to defraud investors and dismissed the case with prejudice, the paper reported. The plaintiffs cannot file an amended complaint, according to the ruling.