Judge recuses himself in accounting fraud suit against Halliburton
10 Aug. 2004
WASHINGTON, Aug. 10 (HalliburtonWatch.org) -- The U.S. District Court judge overseeing a class action lawsuit against Halliburton recused himself from the case because his children own stock in the company. Judge David Godbey said he had purchased Halliburton stock for his children many years ago and decided it may pose a conflict of interest.###
Arthur Shingler of the Scott & Scott law firm, which represents the lead plaintiff in the suit, asked the judge to step down from the case. Scott & Scott represents the Archdiocese of Milwaukee Supporting Fund, Inc., (or AMS) which rejected a $6 million settlement accepted by three other plaintiffs last May.
Judge Godbey was expected to approve the $6 million settlement on Aug. 26, but approval could now be delayed because of the judge's recusal.
The AMS Fund is seeking certification of its claims as a class action. Its lawsuit says Halliburton changed accounting methods in 1998 in order to make its financial statements appear more profitable than was actually the case. The Fund says Halliburton's failure to inform investors of the change to a more favorable accounting method amounted to deception of shareholders. The Fund also claims Halliburton overbilled for services and overstated accounts receivable from 1998 to 2002 to boost profit.
Vice President Dick Cheney is not a defendant in the lawsuit, but the alleged fraud occurred during his tenure as CEO for Halliburton.
The case has been transferred to U.S. District Court Judge Barbara Lynn in Dallas, Bloomberg News reported.
The Securities and Exchange Commission settled a similar case on Aug. 3 that accused Halliburton of "materially misleading" shareholders during the period when Dick Cheney was CEO.
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