WASHINGTON: The US Supreme Court on Friday agreed to hear an appeal filed by a subsidiary of chipmaker Broadcom Inc seeking to put an end to a shareholder lawsuit concerning its 2015 acquisition of Emulex Corp.
The legal question, which could affect other cases, is whether under the Securities and Exchange Act shareholders need to show intent to defraud when suing a company over statements made during the merger and acquisition process.
Avago Technologies Wireless Manufacturing, which later merged with Broadcom, paid almost $610 million to acquire Emulex Corp in 2015. Emulex made equipment for data centres such as chips and routers.
Gary Varjabedian, an Emulex shareholder, filed a securities class action lawsuit in federal court in California around the time of the deal seeking to prevent it. The move failed, but Varjabedian amended his lawsuit to include a claim that Emulex had failed to disclose data about other transactions between semiconductor companies when urging shareholders to accept the offer. — Reuters
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