The U.S. Supreme Court on Monday declined to consider whether the D.C. Circuit improperly revived a securities class action accusing Harman International of propping up its stock price ahead of a failed private-equity merger, despite claims Harman’s statements were protected.
The high court denied Harman International Industries Inc.’s petition for writ of certiorari, leaving intact the D.C. Circuit’s June 2015 decision finding statements Harman issued about sales projections for its personal navigation devices were not accompanied by “meaningful cautionary language” and so not covered by safe harbor protections.
The Supreme Court’s order denying the petition, issued without comment on Monday, means Harman must face a proposed securities class action from investors claiming Harman misrepresented the strength of its European sales for PNDs and other products in order to inflate its stock price in the run-up to a planned $8 billion acquisition by Kohlberg Kravis Roberts & Co. LP and a private equity Goldman Sachs & Co. affiliate.
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