ADT 2005 Annual Report Download - page 97

Officer, and PricewaterhouseCoopers LLP, our former independent auditors. As against defendants
Breen and FitzPatrick, the complaint asserts a cause of action under Section 20(a) of the Securities
Exchange Act of 1934. On March 25, 2005, the United States District Court for the District of New
Hampshire granted plaintiff’s motion to amend. Plaintiff filed an amended complaint that day. On
March 28, 2005, the Court denied defendants’ motion to dismiss the original complaint, without
prejudice to the defendants’ ability to move against the amended complaint. On April 25, 2005,
defendants moved to dismiss the consolidated amended class action complaint. On September 2, 2005,
the United States District Court for the District of New Hampshire entered a Memorandum and Order
dismissing the amended complaint. On October 18, 2005, plaintiff filed a notice to appeal in the United
States District Court for the District of New Hampshire.
As previously reported in our periodic filings, an action entitled Hess v. Tyco International Ltd., et
al., was filed on June 3, 2004 in the Superior Court of the State of California for the County of Los
Angeles against certain of our former directors and officers, our former auditors and Tyco. On
September 27, 2004, the Company entered into a stipulation with the plaintiffs staying the litigation
during the pendency of plaintiffs’ National Association of Securities Dealers, Inc. arbitration to which
Tyco is not a party. That action remains stayed.
As previously reported in our periodic filings, the United States District Court for the District of
New Jersey granted one plaintiff’s motion for appointment as lead plaintiff in Stumpf v. Tyco
International Ltd., an action originally filed on July 28, 2003 and O’Loughlin v. Tyco International Ltd.,
an action originally filed on September 26, 2003. On December 13, 2004, lead plaintiff Mark Newby
filed a consolidated securities class action complaint purporting to represent a class of purchasers of
TyCom securities between July 26, 2000 and December 17, 2001. Plaintiff names as defendants Tyco
International Ltd., TyCom, Ltd., Goldman Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith,
Incorporated and Citigroup Inc., along with certain former Tyco and TyCom executives. The complaint
asserts causes of action under Sections 11 and 15 of the Securities Act of 1933 and under Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against
Tyco, TyCom, Goldman Sachs, Merrill Lynch, Citigroup and certain former Tyco and TyCom executives.
The complaint alleges the TyCom registration statement and prospectus relating to the sale of TyCom
securities were inaccurate, misleading and failed to disclose facts necessary to make the registration
statement and prospectus not misleading. Further, the complaint alleges the defendants violated
securities laws by making materially false and misleading statements and omissions concerning, among
other things, executive compensation, Tyco’s and TyCom’s finances and TyCom’s business prospects. On
February 18, 2005, the Company moved to dismiss the consolidated securities class action complaint.
On September 2, 2005, the United States District Court for the District of New Hampshire granted in
part and denied in part the Company’s motion to dismiss. The Court granted the Company’s motion to
dismiss allegations that the TyCom registration statement and prospectus were misleading to the extent
that they failed to disclose alleged looting of Tyco by former senior executives, accounting fraud, analyst
conflicts and the participation by James Brennan in the offering, because plaintiffs failed to plead that
those alleged omissions were disclosed during the class period, with a resultant drop in the value of
TyCom stock. However, the Court denied the Company’s motion to dismiss with respect to other
allegations.
As previously reported in our periodic filings, on November 27, 2002 the State of New Jersey, on
behalf of several state pension funds, filed a complaint, New Jersey v. Tyco, in the United States District
Court for the District of New Jersey against Tyco, our former auditors and certain of our former
officers and directors. On February 11, 2005, plaintiffs filed a Second Amended Complaint against
Tyco, our former auditors, and certain of our former directors and officers. As against all defendants,
the amended complaint asserts causes of action under Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder, for common law fraud, aiding and abetting common law
fraud, conspiracy to commit fraud and negligent misrepresentation. Claims are asserted against the
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