Class Action Suit Filed Against Microsoft Over Surface RT

Robbins Geller Rudman & Dowd today announced that a class action has been commenced in the United States District Court for the District of Massachusetts on behalf of purchasers of Microsoft Corporation common stock during the period between April 18, 2013 and July 18, 2013.

CEO Steve Baller, Former CFO Peter Klein, Tami Reller, and Frank H. Brod are personally named in the suit.

The complaint charges Microsoft and certain of its officers with violations of the Securities Exchange Act of 1934. Microsoft is the world’s largest software company, primarily as a result of its near-monopoly on Windows personal computer (“PC”) operating system software and its Microsoft Office collection of productivity programs.

The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and its tablet computer, the Surface RT. Specifically, defendants misrepresented and failed to make public the following adverse facts:

  • (i) that the Company’s Surface RT product was experiencing poor customer demand and lackluster sales;
  • (ii) that the Company’s Surface RT inventory experienced a material decline in value during the quarter ended March 31, 2013;
  • (iii) that the Company’s financial statements for the quarter ended March 31, 2013 were materially false and misleading and violated Generally Accepted Accounting Principles and Microsoft’s publicly disclosed policy of accounting for inventories;
  • (iv) that the Company’s Form 10-Q for its third quarter of 2013 failed to disclose then presently known trends, events or uncertainties associated with the Surface RT product that were reasonably likely to have a material effect on Microsoft’s future operating results; and
  • (v) that based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s Surface RT product during the Class Period.

On July 18, 2013, Microsoft issued a press release announcing its financial results for the fiscal 2013 fourth quarter and year end, the periods ended June 30, 2013. For the quarter, the Company reported revenue of $19.9 billion and net income of $4.97 billion, or $0.59 per share. The Company’s results for the quarter were adversely impacted by a $900 million inventory charge, or an amount equal to $.07 per share, related to Surface RT “inventory adjustments.” On this news, Microsoft common stock suffered its biggest price decline in more than four years, plunging $4.04 per share, or 11.4%, on very heavy trading volume to close at $31.40 per share.

Plaintiffs seek to recover damages on behalf of all purchasers of Microsoft common stock during the Class Period (the “Class”). The plaintiffs are represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Read the full complaint here (pdf):

In my personal opinion, this looks like a quick way for the law firm to make some money and this suit will be settled quickly.  I do not think Microsoft did anything wrong here.  If you own MSFT stock, join the lawsuit you may make a little money.

Source: Business Wire

  • Duk3togo

    It doesn’t end for MS, next week they’ll get sued for having the name Microsoft.

    • grs_dev

      The word micro in Microsoft is misleading. Let’s sue!!!!

  • jaylyric

    It’s a crying shame.. I wouldn’t pay sh!t. I hope that bs gets thrown out.

  • RodHull

    So they’re whining that MS didn’t make as much of a profit as they hoped? Isn’t that kinda the risk you take when buying stocks and shares? Morons.

    • bawboh

      I think the problem is that they bought stocks on the premise that the RT was doing well, which they believe MS to have been lying about. Not saying I agree, but it’s not just because they bought stocks in them. 😉

      • Tips_y

        Media kept complaining that MS was mum on the sales of the Surface, or indeed of W8 as a whole, so it’s not true that MS said, or even hinted, that the Surface sales were doing well. When you buy stocks, it’s always with the caveat that the value can go up or down at any time.


    I am getting effin tired of stock purchasers. Nobody wants to take a chance when they purchase stock. They want a sure fire way to make more money. News flash, if you want guaranteed revenue, maybe you shouldn’t be in the stock market.

  • counterblow

    if this goes through someone could do the same thing for Windows Phone or any item really that Microsoft chooses not to report on. Technically I don’t think they had to take a write down until 2nd qtr 2014.

  • Ian Too

    Over the last three years, Microsoft’s share dividend went up by almost 50%, not a bad increase in income for people who basically do nothing.

    I have a scheme by which Microsoft can earn some more money for their investors. They should send them plastic tubes, through which lumps of coal – proportionate with their share holding – can be inserted rectally. The said carbon deposits could then be removed after a few hours as little brown diamonds. I’m sure Nokia would be eager to design the tubes for them.

    The other thing investors could do is get a real job.

  • Beezer

    This is stupid and ridiculous, I’m a stock owner and I’m not crying about surface or Windows phone.

    The stock has been doing well, reaching a good high.

    Surface flopped, so what. Next time vote for Bill Gates to come back just like I always do, idiots, and I won’t cash in with these jack asses. I hate these kinds of people, they’re in the same group of people who sue for not putting a “caution: hot” warning on paper cups or slip on spills on purpose then sue for not having a sign. Morals people. Morals.

    • oldjovian

      Morals are largely determined in today’s world by what you can get away with . . . if you can get away with it, it’s OK!

  • Beezer

    Can you guys get a mobile friendly version of this site going?

  • Albert

    I wonder if Apple stock holder are going to follow the same path after all there stock has dropped 33%. At least Microsoft shares have increased in value.

  • techblogger

    Amubulance chasers. F ’em. Let ’em chase.