Cisco, Tyson sued for alleged options abuse
Wed Feb 16, 2005 05:20 PM ET
CHICAGO, Feb 16 (Reuters) - Investors on Wednesday sued Cisco Systems Inc. (CSCO.O: Quote, Profile, Research) and Tyson Foods Inc. (TSN.N: Quote, Profile, Research) , alleging that they issued stock options that at times benefited company officials and hurt shareholders.
Amalgamated Bank, which describes itself as "America's Labor Bank," filed the lawsuits in state courts. The companies used the stock incentives to "raid corporate piggy banks through carefully timed grants of stock options to directors," according to a statement released by Amalgamated's attorneys.
Representatives for both Cisco Systems, the largest maker of gear to direct Internet traffic, and Tyson, the biggest U.S. meat producer, said they had not yet been served with the suits and could not comment.
Amalgamated's attorneys said they were filing the suits on behalf of LongView MidCap 400 Index, an institutional investor in Tyson, and LongView Collective Investment Fund, a holder in Cisco.
"There is no doubt in my mind that timed options represent the next big wave in corporate governance reform," said Jay Eisenhofer, a partner in Grant & Eisenhofer P.A., which represents the plaintiffs.
The complaint against Tyson alleges that the Springdale, Arkansas, company granted stock options to some directors and officers before company announcements that defendants knew, at the time of the options grants, "would materially inflate the publicly traded price of Tyson's stock."
Similar claims were alleged in the Cisco suit.
Cash is King until further notice!!!
My comments on companies are usually my opinion of long term success (years). The PPS may go up or down greatly in the meantime depending on the number of greedy suckers with money.
