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 The decision, issued on March 27 by U.S. District Judge Eric Melgren
in Kansas City and obtained by Reuters on Wednesday, came as Sprint,
now 80 percent owned by Japan's SoftBank Corp, eyes a possible
merger with T-Mobile US INC even though U.S. regulators appear set
against a deal.
Stephanie Vinge Walsh, a spokeswoman for Sprint, said the Overland
Park, Kansas-based company is disappointed with the court's decision
to certify a class, which is not a ruling on the case's merits.
The plaintiffs accused Sprint and former CEO Gary Forsee of
inflating Sprint stock and bond prices between October 2006 and
February 2008 by covering up difficulties that arose after the
Nextel merger.
They said Sprint trumpeted in press releases, conference calls and
regulatory filings how it was receiving billions of dollars in
benefits from the merger, when in fact cultural and technological
differences were impeding the integration of wireless networks and
causing it to lose thousands of customers.
In January 2008, the month after Dan Hesse was named to replace
Forsee as CEO, Sprint disclosed that it lost 683,000 customers in
three months and its share price fell by 25 percent in a single day,
the plaintiffs said. Further disclosures also hurt the stock price,
they added.
In certifying a class of stock and bond investors, Melgren concluded
that the plaintiffs' claims "are substantially similar, rely upon
much of the same evidence, and will require many of the same
witnesses.
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"A single class action is a preferable and superior method to
duplicative litigation by individual parties," he said.
Class certification can make it easier to reach larger settlements
at lower cost than if investors sued individually.
Lead plaintiffs are the PACE Industry Union-Management Pension Fund
in Tennessee, Sweden's Skandia Life Insurance Co and the West
Virginia Investment Management Board.
(Reporting by Marina Lopes; editing by Paul Simao)
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