Arbitron Pays $7m to Settle Shareholder Lawsuit

US radio ratings giant Arbitron has reached a $7m legal settlement with a shareholder, regarding claims that the company misled investors about the rollout of its Portable People Meter service (PPM).

In April 2008, The Plumbers and Pipefitters Local Union Pension-Annuity Trust Fund filed the case in the US District Court for the Southern District of New York, in which it alleged that former CEO Steve Morris and former CFO Sean Creamer (currently COO) had broken federal securities laws by failing to admit that there would be delays in the commercialization of the PPM ratings service in November 2007. Additionally, the union asserted there had been stock sales conducted by company insiders during the period - although no individuals were named.

Arbitron denied the claims and both Morris and Creamer filed motions to dismiss the class action complaint. In September 2010, the court granted Creamer's motion to dismiss the plaintiff's claims against him, but rejected motions by Arbitron and Morris to dismiss the lawsuit completely.

Last month, as a result of mediation, Arbitron and its insurers agreed to settle the case for $7m, which will be paid for by the company's insurance. However, in a recent SEC filing Arbitron said that a second lawsuit - Pace v Morris - was still pending. The suit is based on the same allegations as the union's class action lawsuit, and asserts claims against the defendants for 'misappropriation of information, breach of fiduciary duty, abuse of control, and unjust enrichment'.

The suit also adds claims for breach of fiduciary duty relating to the retirement of Morris in 2009 and the resignation of Arbitron's subsequent CEO Michael Skarzynski in 2010. The plaintiff is seeking compensation plus attorneys' fees and costs, but Arbitron said in a statement that it intends to defend itself and its interests vigorously against these allegations.

Earlier this week, Arbitron agreed to pay $400k to settle a lawsuit in California in which it was alleged to have under-represented black and Hispanic listeners in California, Los Angeles and San Francisco.

Web site: www.arbitron.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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