JDS Uniphase Writes off $44 Billion in Goodwill

The complaint alleges that the directors and officers of JDSU violated California's insider selling statute, Corporations Code Section 25402, by selling some 13 million shares while in possession of material non-public adverse information about the company; breached their fiduciary duty to the company by engaging in insider selling and failing to disclose material adverse information to the public; and wasted the company's corporate assets.

The defendants' strategy of embarking on a two-year JDSU stock-financed acquisition spree required that JDSU maintain or increase its share price.  The complaint alleges the acquisition strategy eventually pushed the defendants to falsely portray JDSU's acquisitions as successful and in step with the demands of the industry. According to the complaint, defendants did not properly record write-downs of JDSU's inventory and intangible assets or accrue losses in excess inventory and purchase commitments, as required by GAAP and SEC rules.

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