Olympus Faces U.S. Lawsuit Over Alleged Fraud

By Mariko Yasu and Edvard Pettersson - Nov 16, 2011 10:34 AM GMT+0700

Olympus Corp. (7733), the camera maker being investigated by Japanese, U.S. and U.K. authorities for alleged accounting irregularities, was sued by an investor in its American depositary receipts seeking class-action status.

Olympus, former president Michael C. Woodford, ex-chairman Tsuyoshi Kikukawa and current president Shuichi Takayama caused the company to engage in fraud, resulting in investor losses, according to the complaint filed Nov. 14 in federal court in Pennsylvania.

The lawsuit by New York-based Sarraf Gentile LLP seeks class, or group, status on behalf of other investors in the U.S. Plaintiff Lloyd Graham, who bought Olympus ADRs on Oct. 27, seeks unspecified damages.

New York-based Bernstein Liebhard LLP said in a separate statement today it also had filed a class lawsuit in the same court against Olympus. That filing couldn’t be confirmed on the court’s website.

Olympus shares fell by more than 34 percent on Nov. 8 in New York, the day the company reversed denials that there was any wrongdoing over $687 million in advisory fees paid on its $2 billion acquisition of Gyrus Group Plc in 2008. The company said it had paid the inflated fees to advisers to hide losses.

Kikukawa resigned last month and an internal investigation is continuing into allegations about accounting problems made by Woodford after he was fired Oct. 14.

Yoshiaki Yamada, a spokesman for Tokyo-based Olympus, declined to comment, saying he hasn’t confirmed the lawsuit yet. Olympus said last week its shareholders in Japan requested the company’s auditors to sue directors for 139.4 billion yen ($1.8 billion) in compensation.

The case is Graham v. Olympus Corp., 11-07103, U.S. District Court, Eastern District of Pennsylvania (Allentown).

To contact the reporters on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net; Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editors responsible for this story: Douglas Wong at dwong19@bloomberg.net; Michael Tighe at mtighe4@bloomberg.net.