Florida appeals court overturns $1.58B fraud verdict against Morgan Stanley

[JURIST] The Florida Fourth District Court of Appeal [official website] on Wednesday overturned [opinion text, PDF ] a $1.58 billion 2005 jury verdict awarded to billionaire financier and Revlon [corporate website] chairman Ron Perelman [corporate profile], finding that the plaintiffs failed to prove compensatory damages. Coleman Parent Holdings, Inc., of which Perelman held a controlling interest, sued Morgan Stanley [corporate website] after Morgan Stanley advised Coleman on a merger between Coleman and Sunbeam [corporate website], alleging that Morgan Stanley helped Sunbeam inflate its stock price until after the merger. A jury found against Morgan Stanley for conspiracy and aiding and abetting fraud, awarding compensatory damages of $604,334,000 and punitive damages of $850 million [JURIST reports]. On appeal [JURIST report], the Florida appeals court agreed with Morgan Stanley that Coleman wasn't entitled to compensatory damages because he had not established the "fraud-free value of the Sunbeam stock on the date of the merger transaction."

Perelman told the media on Wednesday that he intended to appeal the decision to a full panel of the Florida appeals court, and then to the Florida Supreme Court if necessary. Dow Jones has more.

 

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