Western Union 2015 Annual Report Download - page 214

THE WESTERN UNION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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Shareholder Action and Other Matters
On December 10, 2013, City of Taylor Police and Fire Retirement System filed a purported class action complaint in the
United States District Court for the District of Colorado against The Western Union Company, its President and Chief Executive
Officer and a former executive officer of the Company, asserting claims under sections 10(b) and 20(a) of the Securities Exchange
Act of 1934 (“Exchange Act”) and Securities and Exchange Commission rule 10b-5 against all defendants. On September 26,
2014, the Court appointed SEB Asset Management S.A. and SEB Investment Management AB as lead plaintiffs. On October 27,
2014, lead plaintiffs filed a consolidated amended class action complaint, which asserts the same claims as the original complaint,
except that it brings the claims under section 20(a) of the Exchange Act only against the individual defendants. The consolidated
amended complaint also adds as a defendant another former executive officer of the Company. The consolidated amended complaint
alleges that, during the purported class period, February 7, 2012 through October 30, 2012, defendants made false or misleading
statements or failed to disclose adverse material facts known to them, including those regarding: (1) the competitive advantage
the Company derived from its compliance program; (2) the Company’s ability to increase market share, make limited price
adjustments and withstand competitive pressures; (3) the effect of compliance measures under the Southwest Border Agreement
on agent retention and business in Mexico; and (4) the Company’s progress in implementing an anti-money laundering program
for the Southwest Border Area. On December 11, 2014, the defendants filed a motion to dismiss the consolidated amended complaint.
The Court referred the motion to a Magistrate Judge, who, on April 14, 2015, issued a report and recommendation, which
recommended that the defendants’ motion to dismiss be granted and that the consolidated amended complaint be dismissed in full.
On April 28, 2015, plaintiffs filed objections to the report and recommendation. On September 29, 2015, the Court (a) overruled
in part and sustained in part plaintiffs’ objections to the report and recommendation; (b) adopted in part the recommendation; (c)
granted in part and denied in part defendants’ motion to dismiss the consolidated amended complaint; and (d) dismissed the claims
against one of the individual defendants and denied the motion as to the remaining defendants. In particular, the Court denied the
motion to dismiss as to certain statements made by the Company’s President and Chief Executive Officer and a former executive
officer during an investor conference call on July 24, 2012, related to category (3) above concerning the effect of compliance
measures under the Southwest Border Agreement on agent retention and business in Mexico. On November 3, 2015, defendants
filed an answer to the consolidated amended complaint. On February 5, 2016, plaintiffs notified the Court that a witness on whom
they had relied in bringing their claims did not have firsthand knowledge of events occurring at Western Union during calendar
year 2012, and that without the witness’ support of their claims the consolidated amended complaint would not have survived the
defendants’ motion to dismiss. The same day, plaintiffs voluntarily dismissed the consolidated amended complaint with prejudice.
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