Class Action Lawsuit against AMD

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mrmt

Diamond Member
Aug 18, 2012
3,974
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If JF-AMD could get away with his outrageous lies on so many forums, does AMD really have that much to worry about here?

There's a reason on why most C-level executives always resort to vague statements about everything, especially when they are talking about subjects they have deep knowledge. C-level executives answer as both company representatives and as a person to every information they give to investors. They can ultimately end up in jail for things they do or say. That's not a burden that non-executives employees bear.

JFAMD obviously wasn't bound by these rules, otherwise AMD would have a hell of a problem in explaining how first-hand info about their products, e.g., information relevant for the stock valuation, was being published in an internet forums and not in corporate events as it should be. His blunt and clueless statements were the antithesis of the tone requested by a C-level position.
 

Burpo

Diamond Member
Sep 10, 2013
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Again, all it takes for something to be green-lit for trial is potentially verifiable information of a crime. The judge hasn't decided anything because it hasn't gone to trial yet.

The misinformation from the parrots in this thread is mind-numbing. Heck, even one of you dropped the word "decision."


Parrot? Have you ever even been in a Federal Court? I have, and so far it doesn't look good for AMD, (unless they can prove their executives were mislead).. The Judge already denied their motion to dismiss and said it was " relatively less persuasive" than the Plaintiffs allegations. Plaintiffs claim to have Confidential Witnesses, and promise more witnesses and more information during discovery.. At some point the Judge may ask both plaintiffs and defendants to agree to a mediation hearing outside of the court, and before the actual trial, to try & reach a settlement.. It will be interesting to see what happens then, because either party can refuse. I'm fully aware that it hasn't gone to trial and nothing has been proven one way or the other, but from someone who's been in the hotseat, AMD better have their plausible deniability ducks in a row..
 

aigomorla

CPU, Cases&Cooling Mod PC Gaming Mod Elite Member
Super Moderator
Sep 28, 2005
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A confidential witness will not hold in court.

The defendant must be allowed to cross examine ALL witnesses.
Also if it was truely a Federal Violation, it would not be a private attorny, but FINRA/SEC itself that does the investigation.
Its probably Federal because it has to do with a State Retirement Fund.
But in all likely its a Civil if the plantiff is demanding a settlement of some sort.

I dont read ANYTHING about FINRA/SEC stepping in.
 

Burpo

Diamond Member
Sep 10, 2013
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Plaintiffs Babak Hatamian, et al. bring this securities fraud action against defendants Advanced Micro Devices, Inc., et al. (“AMD&#8221. Plaintiffs allege a violation of Section 10(b) (Count I) and Section 20(a) (Count II) of the Securities Exchange Act, and Rule 10b-5 promulgated thereunder.

It's a civil action, not criminal.. Confidential Witnesses will be available for cross examination.. Robbins Geller didn't take this to lose.. Most likely it will be settled out of court..
 
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Burpo

Diamond Member
Sep 10, 2013
4,223
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AMD filed a request & was granted "Judicial notice" of 20 documents it had provided to the SEC. Meaning the docs submitted "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned" (in other words, already publicly disclosed filings submitted to the SEC). In a civil case, the court must instruct the jury to accept the "noticed" fact as conclusive.
This may be where AMD is going to challenge the sufficiency of the first two elements: "material misrepresentation or omission, and scienter", but that's merely conjecture on my part. It will be interesting to see how this all plays out tho..
 

aigomorla

CPU, Cases&Cooling Mod PC Gaming Mod Elite Member
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Sep 28, 2005
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Plaintiffs Babak Hatamian, et al. bring this securities fraud action against defendants Advanced Micro Devices, Inc., et al. (“AMD&#8221. Plaintiffs allege a violation of Section 10(b) (Count I) and Section 20(a) (Count II) of the Securities Exchange Act, and Rule 10b-5 promulgated thereunder.

It's a civil action, not criminal.. Confidential Witnesses will be available for cross examination.. Robbins Geller didn't take this to lose.. Most likely it will be settled out of court..

again burpo those 3 words have its own regulators.

Anyone with a series 63 series 7 license knows this.
Only the SEC / FINRA can file judgement against a violation and take it to court.

http://en.wikipedia.org/wiki/U.S._Securities_and_Exchange_Commission
It holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry

a civil lawyer can not over rule the SEC.

This case is more CIVIL then FEDERAL....

AMD filed a request & was granted "Judicial notice" of 20 documents it had provided to the SEC. Meaning the docs submitted "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned" (in other words, already publicly disclosed filings submitted to the SEC). In a civil case, the court must instruct the jury to accept the "noticed" fact as conclusive.
This may be where AMD is going to challenge the sufficiency of the first two elements: "material misrepresentation or omission, and scienter", but that's merely conjecture on my part. It will be interesting to see how this all plays out tho..

the SEC hasnt ruled yet on this case.
There is no letter or news on the SEC finding AMD guilty of anything.
You can submit all you want to the SEC, without a ruling its meaningless.

Before you assume AMD will be burnt by the fire, its best to wait on a ruling of SEC if any will arrive.
But one must also note, then any investment is always speculative. Meaning you can lose or you can gain.
The one more responsible for the loss is the investment firm.
They should of pulled out when things were going down, instead of listening to the speculative reports from AMD.

In all, if AMD wanted to, they can easily get away with it, as the investment firm holds most of the responsibility, not the company itself.
 
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Burpo

Diamond Member
Sep 10, 2013
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It's a civil action being tried in the United States District Court, Northern District of California. That was stated much earlier in this thread.
 

aigomorla

CPU, Cases&Cooling Mod PC Gaming Mod Elite Member
Super Moderator
Sep 28, 2005
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It's a civil action being tried in the United States District Court, Northern District of California. That was stated much earlier in this thread.

then where did this come from?

Parrot? Have you ever even been in a Federal Court? I have, and so far it doesn't look good for AMD



i thought u were implying this was a federal case...
 

Burpo

Diamond Member
Sep 10, 2013
4,223
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California's first two federal courts (established simultaneously) divided the state into two districts, southern and northern. These are Federal courts.. That's all I said.
I have not been in the northern district.
 
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Apr 20, 2008
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Parrot? Have you ever even been in a Federal Court? I have, and so far it doesn't look good for AMD, (unless they can prove their executives were mislead).. The Judge already denied their motion to dismiss and said it was " relatively less persuasive" than the Plaintiffs allegations. Plaintiffs claim to have Confidential Witnesses, and promise more witnesses and more information during discovery.. At some point the Judge may ask both plaintiffs and defendants to agree to a mediation hearing outside of the court, and before the actual trial, to try & reach a settlement.. It will be interesting to see what happens then, because either party can refuse. I'm fully aware that it hasn't gone to trial and nothing has been proven one way or the other, but from someone who's been in the hotseat, AMD better have their plausible deniability ducks in a row..

I spent my early twenties working investigations for a large U.S. retailer. I've been a key witness in one federal case and a supporting witness in several others. Since my city and the nature of the work crosses state lines, those crimes become federal. From funny money, organized retail theft (both internal and external) and physical crimes, I was involved in our judicial system extensively before joining our military. Proving funny money is so much easier than proving (without reasonable doubt) that AMD's execs knowingly did something wrong.

The fact it hit this far without being settled shows they're not caving in just yet.
 

Anon_lawyer

Member
Sep 8, 2014
56
1
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This case will settle, they always do. It's just not worth it (for the plaintiffs or AMD) to go to trial. In the settlement they'll pay attorneys fees, a small amount of money to the lead plaintiff, and promise never to do it again.

This kind of case is pretty common. A company announces [bad news], the stock drops, and someone sues saying that when the company previously announced [good news] they bought, or at least didn't sell, their stock. If they had known about [bad news] they would have, but since management misled them they lost money. Plaintiffs attorneys race to find someone who might have lost money to serve as lead plaintiff, and then race to the courthouse to be lead counsel.

Make no mistake, plaintiff's attorneys are in the drivers seat. They probably spend most of their time on cases like this It's a fairly standard securities case, where there's a decent chance the lawyers on both sides have litigated the same kind of case against each other in the past.

To win the case, plaintiffs would have to show that AMD made statements that they knew or should have known were wrong. Forward looking statements, like forecasts, are very hard to show were wrong. But facts about the current status of something is susceptible to direct proof.

Now that the lawsuit survived a motion to dismiss, the plaintiffs will get discovery. The motion to dismiss is resolved on the basis of assuming that everything the plaintiff has asserted is true, and then asking if the plaintiffs have a case. There are detailed facts that the plaintiffs need to allege to survive a motion to dismiss. While this is a real barrier, most plaintiffs attorneys are pretty good. They don't much bother if they don't think there's a case that can at least survive a motion to dismiss.

They will be entitled to documents relevant to the case (email, memos, reports, etc.) and depositions of the relevant people. The precise contours of what they get will be negotiated by counsel, and ordered by the court if they can't work out something reasonable. (Practice tip - judges HATE having to work out your discovery disputes. Be reasonable and work something out yourselves.)

Somewhere during this phase is where the case will most likely settle. Maybe after the document discovery is done - often plaintiffs attorneys want to do a fair bit of that phase to prove they did the work (and justify the award of attorneys fees) and defendants want to settle before having to do depositions of executives. Possibly it won't settle until after discovery is complete, and there are motions for summary judgment. Likely we won't hear much of anything until a settlement is announced, though.
 
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Burpo

Diamond Member
Sep 10, 2013
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Even then, we likely will never know the settlement terms. I had to agree not to divulge the details when I settled. That information is still not public (as far as i know). It was a very small fraction of the summary judgement they were awarded a month later tho. They considered it a win.. So did I.. The only ones that made any money were the lawyers.
 
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MiddleOfTheRoad

Golden Member
Aug 6, 2014
1,123
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Ugh... this thread hurts my head.

(1) MiddleoftheRoad - listen to mrmt. He has a bunch better grasp of the law related to this case. Would an outright confession from AMD management be good evidence for plaintiffs? Obviously. Is it necessary evidence? Of course not. Circumstantial evidence can be more than sufficient.

I seriously doubt that. I work for the legal department of a multinational corporation.

Second -- the thin legal claims in this case have been thoroughly debunked in this article:
http://www.fool.com/investing/gener...ed-micro-devices-inc-securities-fraud-la.aspx

The $100 million writedown had a negligible impact on AMD's stock price (as pointed out in this article). The decline of the PC industry as a whole had a far more significant impact (and AMD's weakened market position against Intel). This lawsuit has made the water cooler at the office -- and the lawyers concur with me.... The best case scenario for the plaintiff is a settlement. The burden of proof is nearly impossible to prove without an admission of guilt from AMD management -- and we all seriously doubt they will incriminate themselves under oath (that would destroy any AMD executive's future career prospects).

All the lawyers here think the only way AMD loses this thing is for some crazy activist judge situation. The legal grounds are just too thin -- especially if you take into account AMD's historically rocky stock price.
A drop from $8 to $2 is peanuts.... As mentioned earlier, AMD went from $40 to $2 just 3 years earlier. This case is a loser if it goes to court -- I suspect a settlement for around $20 to 50 million to make the plaintiffs go away.
 
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MiddleOfTheRoad

Golden Member
Aug 6, 2014
1,123
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I also think you may have a somewhat idealistic view of the legal system. To be blunt, a lot of people who file lawsuits do it simply for the money.

Agreed -- There are some lawyers that never even go to court. They simply sue to get into mediation for a settlement. I think the Plaintiffs understand that the legal grounds for this suit are shaky -- and they are doing it just for the settlement money.
 

MiddleOfTheRoad

Golden Member
Aug 6, 2014
1,123
5
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Hanlon's Razor: "Never attribute to malice that which is adequately explained by stupidity."

Exactly. That's why the plaintiff's probably can't win this one.

Mismanagement isn't against the law -- and AMD failed to execute well on so many product during this period of time (Bulldozer).... Proving it was actual fraud and not just ineptitude -- it's a very difficult task without a confession.
 

MiddleOfTheRoad

Golden Member
Aug 6, 2014
1,123
5
0
Parrot? Have you ever even been in a Federal Court? I have, and so far it doesn't look good for AMD, (unless they can prove their executives were mislead).. The Judge already denied their motion to dismiss and said it was " relatively less persuasive" than the Plaintiffs allegations.

Doesn't look good for AMD? That simply isn't true.

An outright dismissal during discovery almost never happens. A judge nearly always gives both parties enough time to build the case. If either party needs additional time beyond what was already granted, they can still ask for a continuance from the judge.

Right now, on the legal grounds -- the Plantiff's have nothing that will hold up in court against cross-examination. That could change if the plantiff's managed to get a strong witness... But again, the chances of former AMD executives incriminating themselves is probably not going to happen. Engineers can certainly testify.... but it would still be hearsay (in relation to the executives) because they were not the ones making the disclosures to investors.
 
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dahorns

Senior member
Sep 13, 2013
550
83
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I seriously doubt that. I work for the legal department of a multinational corporation.

You may. But, that doesn't mean you understand the law.

For instance:

The best case scenario for the plaintiff is a settlement.

That is pretty much always true because trials are expensive and you never really know how they are going to turn out. Ultimately, settlement is usually the best case scenario for both parties.

The burden of proof is nearly impossible to prove without an admission of guilt from AMD management -- and we all seriously doubt they will incriminate themselves under oath (that would destroy any AMD executive's future career prospects).

What do you think the burden of proof is? This is a civil case. The burden of proof is preponderance of the evidence, which simply means that a jury needs to find it more likely than not that the Defendants committed securities fraud. A common example: take two reams of paper and put them on each side of a scale. If one sheet of paper is removed from either side, the scale will tip. That is preponderance of the evidence.

Also, there is no need to have AMD management admit to anything. A company is made up of its employees. And the combined knowledge of the employees is imputed to the company. If there are documents or testimony from AMD employees establishing that people within AMD were aware that the yield issues had not resolved, that is going to be legally sufficient (a different issue is whether it would be sufficient for a jury).

Second -- the thin legal claims in this case have been thoroughly debunked in this article:
http://www.fool.com/investing/gener...ed-micro-devices-inc-securities-fraud-la.aspx

So, the article is focused more on causation - i.e., the extent to which the misleading comments affected the stock price - not on whether or not AMD actually committed fraud. The plaintiffs will have to prove both and causation may be the trickier one to pull off.

The $100 million writedown had a negligible impact on AMD's stock price (as pointed out in this article). The decline of the PC industry as a whole had a far more significant impact (and AMD's weakened market position against Intel).

While I believe it'll be next to impossible to prove that ALL of the decline in AMD's stock price is attributable to the Llano issue, I don't think it'll take much to get a jury to agree that SOME of the drop was caused by Llano. Obviously had Llano not had issues, AMD would have been in a better position. The failure to get Llano to market on time had to have some affect on the stock price.

All the lawyers here think the only way AMD loses this thing is for some crazy activist judge situation. The legal grounds are just too thin -- especially if you take into account AMD's historically rocky stock price.
A drop from $8 to $2 is peanuts.... As mentioned earlier, AMD went from $40 to $2 just 3 years earlier.

The actually dollar value of the stock is irrelevant - it is the percentage of the drop that matters. Do you really think that an 80% drop in a stock price is "peanuts"?

Also, you keep thinking that the volatility of AMD's stock price is going to be a defense. I don't see it. Instead, I'm sure the plaintiffs would use that fact on the offensive. AMD's stock price was/is volatile because its management didn't make good decisions. Lying about Llano is just another example of those bad decisions that adversely affected shareholders of the stock. Juries love patterns like that.

This case is a loser if it goes to court -- I suspect a settlement for around $20 to 50 million to make the plaintiffs go away.

Any case that can get you a substantial settlement is not a loser. Loser cases don't settle.
 

dahorns

Senior member
Sep 13, 2013
550
83
91
Doesn't look good for AMD? That simply isn't true.

An outright dismissal during discovery almost never happens. A judge nearly always gives both parties enough time to build the case. If either party needs additional time beyond what was already granted, they can still ask for a continuance from the judge.

Cases are dismissed all the time prior to discovery. That is what a motion to dismiss does. And during/after discovery cases are attacked through summary judgment. And again, Defendants win those all the time.

Right now, on the legal grounds -- the Plantiff's have nothing that will hold up in court against cross-examination. That could change if the plantiff's managed to get a strong witness... But again, the chances of former AMD executives incriminating themselves is probably not going to happen. Engineers can certainly testify.... but it would still be hearsay (in relation to the executives) because they were not the ones making the disclosures to investors.

Hearsay is an out-court statement presented for the truth of the matter asserted. For instance, if an AMD employee testified that the CEO said "Llano yield issues are killing us," that would be hearsay if you intended to use it to prove that Llano had yield issues.

But it would not be hearsay for an AMD employee to testify as to his knowledge of the yield issues. And that knowledge would likely be imputed to AMD's corporate knowledge. And the employee could also testify that he told management about the problem. Again, not hearsay.

Finally, hearsay has a lot of exceptions. For example, admission against interest. In our example, the AMD engineer could testify to what the CEO said even though it was hearsay because it was an admission against the CEO's interest.
 

IlllI

Diamond Member
Feb 12, 2002
4,927
10
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was this around the time when amd had to basically pay GlobalFoundries a few hundred million(?) not to produce x amount of chips?
 
Aug 11, 2008
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So uh... what was wrong with llano? I missed that whole thing.

Wikis got nothing

Mediocre cpu and gpu performance. I remember how disappointed I was when the chip came out that the igp was not good enough for gaming, and the cpu was nothing new at all, just phenom II, and I think they even had to drop the clocks because of thermal constraints.

It didnt help either that AMD had already been "Conroed", and I think this was about the time Sandy Bridge came out, which absolutely destroyed it in cpu performance.
 

VirtualLarry

No Lifer
Aug 25, 2001
56,566
10,183
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I have a Llano quad-core. Unlocked, I think, not sure. It's not a bad chip, by any means. It was in my previous HTPC. For that duty, it's great. I wouldn't really try gaming on it though.
 
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