Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, September 12, 1995 TAG: 9509120075
SECTION: NATIONAL/INTERNATIONAL PAGE: A-3 EDITION: METRO
SOURCE: Associated Press
DATELINE: NEW YORK LENGTH: Short
Judge Michael B. Mukasey said the plaintiffs in the class-action lawsuit ``were fully on notice'' of the controversy over whether nicotine was addictive when they bought the stock between Feb. 28, 1991, and May 6, 1994.
He said they never established that industry studies existed that would prove the company knew nicotine was addictive.
``Any adverse effect that could have been created by defendants' optimistic statements was countered by the more somber information which credibly entered the market,'' the judge wrote.
``Obviously, we're disappointed,'' said Zachary A. Starr, lawyer for the shareholders.
He said he had not read the decision and could not comment further.
Herbert M. Wachtell, lawyer for Philip Morris, said the company believes it won a ``free speech issue.''
In the lawsuit, shareholders said the company and four of its present or former officers and directors violated securities laws by suppressing information that showed nicotine was addictive.
It said they withheld the information to preserve tobacco profits, artificially inflate the company's stock price and mislead investors.
Mukasey said the information ``was known to the market through the public debate surrounding nicotine and addiction,'' and alleged fraudulent statements by the company were ``expressions of opinion.''
by CNB