The complaint that Microsoft has violated Federal securities laws was filed in the US District Court in Boston by law firm Robbins Geller Rudman & Dowd. Microsoft itself, CEO Steve Ballmer, and other senior Microsoft executives are listed as defendants.
As far as legal documents go, it’s not a bad read. Check it out at:
“The defendants led the market to believe that Microsoft’s launch Surface RT had been executed in a measured and conservative fashion so that it could observe and understand its progress and outcome. What the defendants knew, but failed disclose to investors, however, was that Microsoft’s foray into the tablet market was an unmitigated disaster.”
The nut of the argument is that Microsoft did not disclose just how bad RT sales were until three months after it knew of the problem, thus artificially inflating the company’s share price while it kept the news from the public.
When it did announce the US$900 million writedown, on 18 July, “Microsoft common stock suffered its biggest price decline in more than four years, plunging $4.04 per share, or 11.4%. The magnitude of the decline eviscerated about $34 billion of (sic) the company’s market value.”
The suit says that Microsoft failed to say just how bad Surface RT sales were, or that its inventory "experienced a material decline in value during the quarter ended 31 March 2013." It says Microsoft's financial statements were "materially false and misleading," violating general accounting practices and Microsoft's own polices.
Robbins Geller Rudman & Dowd is a serial class action filer. There are many such companies, in Australia as well as the US, who pursue such actions in the hope of a settlement. Microsoft issues a brief statement saying it had no comments on the case.