Home » Black Swans » Did Amgen Get Screwed By US Supreme Court? Yeah It Did! $AMGN

Did Amgen Get Screwed By US Supreme Court? Yeah It Did! $AMGN

Amgen (Nasdaq:AMGN) recently lost a major court case at the Supreme Court Level. On Feb 27 the justices ruled that investors do not have to prove the materiality of a company’s alleged misrepresentations before obtaining class certification in a securities lawsuit.

The ruling went 6-3 against Amgen. The US Chamber of Commerce was backing the Amgen position. Most observers are surprised by the ruling. Looking at the Board of Directors you have a huge wealth of experience in large caps, drugs, pharma, life sciences, big oil, defence contractor, élite universities, (Harvard and MIT) and wealth management. The bio’s do not indicate any particular experience in managing law suits from a risk management perspective.

Frankly these big shooters are used to getting their own way and perhaps that is why the supreme court helped empower shareholder. The majority decision will make it more difficult for many companies to have this type of lawsuit dismissed before the costly pre-trial discovery process.

Looking at some of the directors they may have been blindsided by this one.

Rebecca Henderson 51, is a professor at Harvard and specializes in Tech strategies.

Ronald Sugar 63, is the retired Chair and CEO of Northrop Grumman. He is used to selling weapons systems and wrangling budget money.

Dr. Tylor Jacks 51, has been a MIT professor since 1992, is a bio-technologist and cancer researcher.

Francois de Cardonnell 65 is a french citizen residing in France and has been at GE, Citigroup, Thomson SA, Pages Jeunes and currently is also a director with Quilvest which is a Luxembourg based wealth manager. American jurisprudence is probably a big mystery.

Robert Eckert 58, who was just appointed in Dec 2012 was CEO of Mattell from 2000 to 2011 and before that President and CEO of Kraft 1997 to 2000. No securities law DNA can be identified.

Frank Biondi 67 was Chair and CEO of Universal Studio as well as President and CEO of Viacom. The man was in the mass entertainment business.

J Paul Reasor 71, was a high-ranking admiral with the US Navy. The man was a warrior not a legal beagle.

Vance Coffman 68 was Chairman and CEO of Lockheed Martin. Merchants of Death do not get lawsuits as a rule.

Frank Herringer 69 was Chair of Transamerica and director of Charles Schwabb and Safeway. If financial services is prone to litigation he certainly did not acquire any transferable skills.

Quite frankly none of the directors has the consigliari skills needed to have avoided this loss in the supreme court. Now expensive and time-consuming lawsuits will take up more corporate time.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti or maybe follow his evil twin who is writing a Wall Street Murder Thriller at twitter@georgegutowski