It's only been around a week since the US-based law firm Holzer Holzer and Fistel LLC began investigating Electronic Arts over possible violation of federal securities laws concerning Battlefield 4. Now another US-based firm, Robbins Geller Rudman & Dowd LLP, is taking things a step further by bringing forth a lawsuit against the developer. If that particular firm sounds familiar to some of you, it's because they were the legal team behind the infamous Enron lawsuit. The group is attempting to launch a class-action lawsuit against EA on the grounds that the company made “materially false and misleading statements” in regards to Battlefield 4.
The complaints outlined in the accusation pertain to laws that were introduced by the Securities Exchange Act of 1934, and pertain to any and all testimony about Battlefield 4 between the dates of July 24 and December 4, 2013. The claim suggests that EA's stock rose to a high-point of $28.13 per share by August 23, 2013, thanks to the “retail strength” of Battlefield 4. This allowed “certain of Electronic Arts’ senior executives to sell their Electronic Arts stock at artificially inflated prices.”
In short, the firm believes that EA purposely misled buyers and stockholders, allowing ranks within its company to cash in on stock that they “may have known” would fall dramatically once the game was actually released. This tactic would have allowed individuals to sell their shares at a high price, anticipating their inevitable plummet, in which they would then be able to “re-purchase” their shares after making a quick profit. The firm is also investigating the Playstation 4 version of the title, claiming that the disclosure of its problems lead EA's share value to drop. EA's stock also dropped substantially when the company announced that it would be putting all future projects on hold.
EA has responded to the media concerning the lawsuit, releasing the following statement:
“We believe these claims are meritless. We intend to aggressively defend ourselves, and we’re confident the court will dismiss the complaint in due course."
If you're curious about the details of the lawsuit, you can check out the claim in its entirety at the following link.