Question
Ebay Settles Shareholders' Suit Against 4 Top Managers
NEW YORK -(Dow Jones)- Ebay Inc. (EBAY) agreed to a $3 million preliminary settlement in a shareholder derivative lawsuit that accused four company officials of improperly accepting hot stock offerings from the online auctioneer's investment banker, Goldman Sachs.
The allocation of shares in initial public offerings, or "spinning," by investment banks was made public by the House Financial Services Committee in the fall of 2003, and the derivative suit against Ebay, in effect, accused the executives of accepting bribery from Goldman in exchange for the company's investment banking business.
In a press release Thursday, Ebay said the settlement calls for three of the executives to pay the company $3.4 million. Ebay plans to give half the proceeds to charities.
In the agreement, the defendants deny that any of the allegations are true.
In addition, Goldman Sachs Group will pay Ebay$395,000, according to a separate press release from the plaintiffs' law firm, Pormerantz Haudeck Block Grossman & Gross.
A Goldman representative confirmed the settlement but declined to comment.
Ebay said executives contributing to the settlement will include Chief Executive Margaret Whitman; its co-founder and its second-largest shareholder, Jeffrey Skoll; and its chairman, Pierre M. Omidyar.
Ebay director Robert C. Kagle was also a defendant in the suit, but won't contribute to the settlement because he derived no profits from the transactions at issue, an Ebay spokesman said.
The proposed settlement is subject to both court and shareholder approval and represent almost all of the profits the individual defendants have actually realized from the purchase and sale of the IPO shares, according to plaintiffs' attorneys.
In February, the court denied Ebay's motion to dismiss the action, and said the defendants' conduct was in conflict with their duties to the corporation.
-John Seward; Dow Jones Newswires; 201-938-5400; AskNewswires*dowjones.com
Answer
Oh well, I guess they just have to live with a billion.
Answer
The finding echoes my belief that Meg at cie are not performing on behalf of eBay and its community, but only looking out for themselves and how they can add still more millions to their personal fortunes.
"(The) executives ... include Chief Executive Margaret Whitman; its co-founder and its second-largest shareholder, Jeffrey Skoll; and its chairman, Pierre M. Omidyar.
The court ... said the defendants' conduct was in conflict with their duties to the corporation."
And still I list.
Larry
Answer
I have an AOL service option set to gather financial information about eBay.
The page shows stock movement, collects articles and press releases that mention eBay and has an investor's chat board. This story came from there.
The chat board, which I occasionally read, is mostly 'I'm smart and you're stupid" remarks with people claiming to know whether the stock will rise or fall and why.
Yesterday someone claimed that the 30 cents rise in the stock price was because of the "good news" that the company had won a lawsuit. (This story)
I don't know but when the Founder, present CEO and the firm's investment banker are found guilty of transactions where the individuals benefited at the expense of the company (with a negative impact on all stockholders and customers) and a settlement is reached where that money (between 3 and 4 million dollars) is paid to the company, I think there is a mixed message.
Now in fairness the settlement is one of those where the defendants say they are not admitting to have done anything wrong but they are going to give all the money back, anyway.
I guess that's good for the company to the extent of the 3 or 4 million dollars but it leaves me uncomfortable that these same people have run the company and still run the company and they are the ones who control billions of dollars and keep explaining to investors and customers why everything they decide is so good for all of our interests.
Maybe this was just a one time event but maybe it's just the one incident where they were caught and we should exercise some healthy skepticism regarding all of their actions and statements.
"Is this a one time mistake or a symptom of their underlying attitude?" is a valid question.
Larry mentioned that he still lists, as do I.
Anyone might ask "Feeling the way you do, why aren't you gone?".
The quick answer is "To where?".
Meg Whitman is the CEO but she isn't the concept, she isn't the platform, she isn't the staff, customers nor the seller community.
eBay is great. It's the present management I don't like.
Some might understand if I replaced the company with a country.
The USA is great. It's some of the things the present management is doing that I don't like.
Plus there is the matter of my own self interest.
I can still make more money using eBay, even with a management I don't respect, than I can elsewhere.
So I stay, make long range plans to further develop my eBay Store, and also work towards using other venues.
Does that make me shallow, without the convictions of expressed ideals, or just a realist? Whatever.
Many alternative venues are developing that give customers a fair value. Just not one big site that offers all that eBay does.
In time I hope to be a part of those sites as well as the improved eBay which emerges after the present management leaves.
I hope that doesn't take too much longer as I'm getting quite old.