On Monday, a federal judge dismissed a lawsuit brought against AOL by some of its former stockholders. According to reports, the earlier stockholders alleged that some AOL executives committed scam when they bought millions of company shares before a major $1 billion patent sold to Microsoft.
The U.S. District Judge Denise Cote claimed that, Complaint’s conspiracy theory is just a speculation. In 2012, Microsoft agreed to pay AOL $1.06 billion to acquire some 800 patents and related applications. Still AOL claims that at the time all those proceedings from the patents would be given back to the shareholders.
AOL chairman and CEO Tim Armstrong said in a statement that, the closing of that transaction represented another major step for AOL in increasing value for their shareholders; just after the deal was finalized. As per the complaint that was filed by ex- stockholders, some AOL executives which include former CFO Arthur Minson and Armstrong; repurchased shares worth 14.8 million in 2011 devoid of acknowledging the forthcoming patent deal with Microsoft.
AOL’s stock skyrocketed 43 percent in one day once after the deal went through. Since they were unaware of the deal, and hence suffered significant financial losses; the former stockholders claim that they sold their shares before the patent sale.
It was presumed that AOL could make a lot of money on its patent portfolio and thus, Judge Cote said the lawsuit failed to prove that AOL executives had made a material misstatement or omission before the patent sale.
Cote claimed that, the media attention and information available at the time renders any suggestion that say, public was not aware and that AOL possessed an extremely valuable patent portfolio.