A U.S. judge dismissed a lawsuit against General Electric Co on Thursday that accused the largest U.S. conglomerate of failing to warn investors of the 2008 profit drop that marked the beginning of a two-year downturn for the company.
U.S. District Court Judge Stefan Underhill wrote in his decision to grant the company's motion to dismiss the suit that the company and top executives including Chief Executive Jeff Immelt and Chief Financial Officer Keith Sherin did not violate securities laws by not warning investors of the profit decline.
Investor Thomas Coyne filed the lawsuit in July 2008 and was joined by several U.S. pension funds on behalf of investors who bought GE shares between March 12 and April 10, 2008.
The first-quarter 2008 profit decline, which caught Wall Street flat-footed and prompted a sharp decline in the shares marked the start of a string of nine consecutive quarters of earnings declines. The world's largest maker of jet engines and electric turbines may break that streak when it reports second-quarter results on Friday.
GE shares have fallen some 59 percent since that report, and were trading at $15.04, down 1 percent on the New York Stock Exchange late on Thursday.
A GE spokeswoman had no immediate comment. The lead attorney for the plaintiffs could not be reached for immediate comment.
The case is Coyne et al v. General Electric Co, et al, U.S. District Court, District of Connecticut, No. 08-01135.
(Reporting by Scott Malone, editing by Leslie Gevirtz)