NETHERLANDS – The €281bn civil service scheme ABP has reached a €161m settlement with the US pharmaceutical company Merck as compensation for loss of equity following the late publication of market-sensitive information.
In a class action, ABP claimed Merck was too late in publishing disappointing test results from a two-year clinical trial, leading to losses for investors that bought equity and options over the period.
Merck continues to deny the claims, contending that it acted responsibly in connection with the study.
The Dutch scheme – together with the Jacksonville Police and Fire Retirement System, the General Retirement System of the City of Detroit and International Fund Management – was a lead plaintiff in the lawsuit, lodged in New Jersey five years ago.
According to ABP, the clinical trial indicated that Merck's anti-cholesterol drug Vytorin had no statistical advantage against atherosclerosis, compared with the generic drug Simvastatin.
The settlement came three weeks before a scheduled trial date and is subject to approval by the court.
ABP chairman Henk Brouwer said: "Equally important to the recovery of our losses, we have taken up this case to underline our views on good corporate governance.
"This outcome should serve as a reminder that material information should be shared with the market as soon as it becomes available.
"Nonetheless, the €161m represents a significant class recovery, and is one of the largest achieved in a case alleging fraud without a government finding of wrongdoing against the company."
ABP was represented by US securities and corporate governance law firm Grant & Eisenhofer, which has successfully represented the scheme in many other shareholder cases.
The class action settlement came to €517m in total.