F ED 4 TE LAW CORPORATION P - Shareholders …shareholdersfoundation.com/system/files/complaints/...24 Weatherford International Ltd., a Swiss corporation. VvTEATHERFORD's shares 25

Case 2:11-cv-01895-JFW -PJW Document 1 Filed 03/04/11 Page 1 of 19 Page ID #:20

1 Kenneth J. Catanzarite (SBN 113 570) F fL [email protected]

2 Nicole M. Catanzarite Woodward (SBN 205746)ncatanzarite , catanzarite.com

3 CATANZ , 14 TE LAW CORPORATION P : 3 72331 West Lincoln Avenue

4 Anaheim California 92501 c r, ' " v ^^ T

Tel: (714 520-5544 f, ' C''` LIF.5 Fax: (714) 520-0650

6 Attorneys for Plaintiffs

7

8 IN THE UNITED STA'T'ES DISTRICT COURT0co 9 IN AND FORT E CENT DISTRICT OF CALIFORNIA0p 10 VISUT KANCHANAPOOM as trustee Case No. N Beach Pediatric Spur eLong g ryof the Lon

o — 11 Associates Retirement Plan One, 1z 0 individually and on behalf of all others

^ > °N°- 12 similarly situated, COMPLAINT FOR¢ VIOLATION OF FEDE !" L

o J Z .. 13 Plaintiffs, SEC ! 11\'I TIES LAWS

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14 vs. Class ActionII-I- Q q 15 WEATHERFORD INTERNATIONAL,

I- W v LTD., a corporation; BERNARD16 J.DUROC-DANNER an individual; Plaintiffs Demand

N — w p ANDREW P. BECN^L an individual- a Trial by JuryQ Q N 17 NICHOLAS F. BRADV, an individual;v N zLO DAVID J. BUTTERS, an individual;

18 WILLIAM MACAULAY, an individual;ROBERT B. MILLARD, an individual;

h 19 ROBERT K. MOSES, JR., an individual;

20 and ROBERT A. RAYNE, an individual,

21 Defendants.

22

23

24 INTRODUCTION AND OVERVIEW

25 1. This is a class action on behalf of all persons who acquired the stock

26 of Weatherford International Ltd. ("WEATHERFORD" or the "COMPANY") in a

27 time period ranging from April 25, 2007 through March 1, 2011 ("Class Period").

28 Plaintiffs allege violations against all Defendants of § l Ob of the Securities

5240301 Complaint for Violation of Federal Securities Laws[WP\l 10304 Complaint.wpd]


1 Exchange Act of 1934 (the "Exchange Act") arising out of false and misleading

2 statements filed with the Securities and Exchange Commission ("SEC") or

3 released to the public during the Class Period (collectively referred to herein as the

4 "Public Disclosures").

5 2. On or about March 1, 201 1, WEATHERFORD announced in a Form

6 8-K filed with the SEC the following:

7 During mana*ement's assessment of the effectiveness ofthe Company s internal control over financial reporting

8 as of December 31, 2010, management identified a

0 material weakness in the Company's internal control

co 9 over financial reportingp

(0 _orting for income taxes. A material

0 weakness is a deficiency, or a combination of

10

deficiencies, in internal control over financial reportingsuch that there is a reasonable possibility that a material

Z W LO0 11 misstatement of the annual or interim financialD 0 -

Z CO statements will not be prevented or detected on a timelyX W 12 basis. In making this assessment, our management used0 ^(L

0 the criteria set forth by the Committee of Sponsoring

G^ ZJ < 13 Organizations of the Treadway Commission in Internal

05Tr Control An Integrated Framework (September 1992).0

Z 0 14 Because of the material weakness described below,

I - Management concluded that, as of December 31, 20 1O,

, 1 15 our internal control over financial reporting for incomeW (n qO

W In taxes was not effective.3: 16

N — W nZ T —

< N 17 3. The 8-K went on to explain that:z LO<

18 As a result of identifying the material weakness, weperformed additional testing to determine whether or not

19 the material weakness failed to identify any materialerrors in our accounting for income taxes. We have

20 substantially completed the testing procedures.d es. Based on,these proceaures, we have identified errors, the

21 correction of which will be adjustments to our historicalfinancial statements and our 20 10 fourth quarter earnings

22 release, totaling approximately $500 million for theperiods from to 20 10. The amount for each year is

23 expected to range from $ 100 million to $150 million.

24 The Public Disclosures containing the above-mentioned historical financial

25 statements were false and misleading on both a GAAP accounting basis and, as

26 alleged herein, material to the investment decision-making process that led to the

27 purchase of WEATHERFORD stock shares.

28 H

2. 5240.301 Complaint for Violation of Federal Securities Laws[WP\1 10304 Complaint.wpd]


1 4. On the day following the 8-K filing, WEATHERFORD's common

2 stock plunged $2.38 per share to close at a price of $21.14 per share. Based on the

3 745,925,000 shares outstanding as disclosed in the January 25, 201 1, fourth

4 quarter 20 10 earnings press release, the decline in share price for

5 WEATHERFORD on March 2,201 1, resulted in a decrease in VVTATHERFORD's

6 market capitalization of approximately $1.775 billion.

7 5. This plunge in value caused Plaintiffs to suffer material damages.

8 J I !'[ SDICTION AND VENUE 0

coo 9 6. This action arises under Sections 10(b) and 20 of the Securities

010 Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. § 78j(b) and 78t, and Rule

Z W LO0 D 11 lOb-5 17 C.F.R. § 240.10b-5 promulgated thereunder.

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I W 12 7. The Court has jurisdiction over the subject matter of this action0 < 0)IL

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013 pursuant to Section 27 of the Exchange Act, 15 U.S.C. § 78aa and 28 U.S.C. §

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Z 0 014 1331.

W-J15 8.q Venue is proper this District pursuant to Section 27 of the<

W U) (JILOLo 16 Exchange Act and 28 U.S.C. § 1391(b), as many of the material acts and injuries

N —Z r)< a N 17 alleged herein occurred within the Central District of California.

zU NQLO 18 THE PARTIES

19 9. Plaintiff Visut Kanchanapoom, M.D. as Trustee of the Long Beach

W 20 Pediatric Surgery Associates Retirement Plan One.

21 10. Defendant WEATHERFORD is a Swiss corporation, and, prior to

22 February 26, 2009, as Weatherford International Ltd., a Bermuda exempted

23 company, which, as of that date, became an indirect, wholly owned subsidiary of

24 Weatherford International Ltd., a Swiss corporation. VvTEATHERFORD's shares

25 were traded on the New York Stock Exchange under the symbol 11WFT'1 at the

26 time of the violations herein alleged.

27 H

28 H

3. 5240.301 Complaint for Violation of Federal Securities Laws[WP\l 10304 Complaint.wpd]


1 11. Defendant Bernard J. Duroc-Danner ("DANNER") is and was at all

2 times relevant hereto the Chairman of the Board of WEATHERFORD. DANNER

3 owned approximately 2.189 million shares of WEATHERFORD stock

4 (approximately 1.2% of the outstanding) and held the beneficial Right to Acquire

5 and additional 6.645 million shares via various stock option plans. Because of

6 DANNIFR's position with WEATHERFORD, he had or should have had full

7 knowledge of the misleading and adverse material non-public information

08 contained in, and omitted from, the Public Disclosures.

co 9 12. Defendant Andrew P. Becnel ("BECNEL") is and was at all times(006 10 relevant hereto the Senior Vice President and Chief Financial Officer ofN

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11 WEATHERFORD. BECNEL owned approximately 499,909 shares of

ozw co I> N — 12 WEATHERFORD stock and held beneficial Right to Acquire and additional

0 < 0)Io < 13 1,008,620 shares via various stock option plans. Because of BECNEL's position

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0 14 with WEATHERFORD, he had or should have had full knowledge of the

W in15 misleading and adverse material non-public information contained in, and omitted

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3: 2: Lo 16 from, the Public Disclosures.N -Z M

< N 17 13. Defendants Nicholas F. Brady, David J. Butters, William Macaulay,z Ln

—U < IS Robert B. Millard, Robert K. Moses, Jr. and, Robert A. Rayne (collectively, the

19 "OUTSIDE DIRECTORS") are and were Directors of WEATHERFORD at all

20 times relevant hereto.

21 a. Nicholas F. Brady owned approximately 879,264 shares of

22 WEATHERFORD stock and held beneficial Right to Acquire and additional

23 5,679 shares via various stock option plans. David J. Butters owned

24 approximately 236,188 shares of WEATHERFORD stock and held

25 beneficial Right to Acquire and additional 365,231 shares via various stock

26 option plans.

27 b. William E. Macaulay owned approximately 770,932 shares of


4. 5240.301 Complaint for Violation of Federal Securities Laws[WP\l 10304 Complaint.wpd]


1 865,238 shares via various stock option plans.

2 C. Robert B. Millard owned approximately 1,312,458 shares of



5 d. Robert K. Moses, Jr. owned approximately 566,464 shares of


7 11 ,441 shares via various stock option plans.

08 e. Robert A. Rayne owned approximately 160,316 shares of

coo 9 WEATHERFORD stock and held beneficial Right to Acquire and additional

0

6 10 501,767 shares via various stock option plans.N

z W LO0 D 0 11 Because of the OUTSIDE DIRECTOR'S positions with WEATHERFORD, they

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z COW 12 had or should have had full knowledge of the misleading and adverse material> N< 0)

ILfr Z < 13 non-public information contained in, and omitted from, the Public Disclosures._j0

Z. z 0 14 14. DANNER, BECNEL and the OUTSIDE DIRECTORS (collectivelyI I D

^- < 1 15 the "INDIVIDUAL DEFENDANTS") along with the officers and directors of

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Lo 16 WEATHERFORD willfully participated in the preparation, review andN —Z T

< N 17 dissemination of the Public Disclosures referenced herein.z LO<

18 CLASS ACTION ALLEGATIONS

19 15. Plaintiffs bring this action as a class action pursuant to Federal Rules

W 20 of Civil Procedure 23(a) and (b)(3) on behalf of the Class defined above.

21 Excluded from the Class are the defendants, members of the immediate family of

22 each of the INDIVIDUAL DEFENDANTS, any subsidiary or affiliate of

23 WEATHERFORD , any of its subsidiaries or affiliates, or any entity in which any

24 excluded person has a controlling interest, as well as the legal representatives,

25 heirs, successors and assigns of any excluded person.

26 16. While the exact number of Class members is unknown and can only

27 be ascertained through appropriate discovery, plaintiffs believe there are

28 thousands of them. Joinder of all Class members is impracticable. Furthermore,

5. 5240.301 Complaint for Violation of Federal Securities Laws[V,TP\l 10304 Complaint.wpd]


1 because the damages suffered by the individual Class members may be relatively

2 small, the expense and burden of individual litigation make it impossible for the

3 Class members individually to redress the wrongs done to them.

4 17. Common questions of law and fact exist as to all members of the

5 Class and predominate over any questions affecting solely individual members.

6 Among the questions of law and fact common to the Class are:

7 a. whether the federal securities laws were violated by the defendants'

08 acts as alleged herein;

co 9 b. whether the INDIVIDUAL DEFENDANTS are "control persons"0p 10 within the meaning of the federal securities laws;N

o D —LO11 C. whether WEATHERFORD and the INDIVIDUAL DEFENDANTS

oW °N° — 12 made false and misleading statements in the Prospectus;0 Q 0

(r J Q .. 13 d. whether the market price of WEATHERFORD securities wasEo 14 artificially inflated in the Class Period as a result of the conduct alleged in

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15 this complaint; andU

Q3 2 Lo 16 e. whether plaintiffs and the other members of the Class have sustainedN- W

Q Q N 17 damages and, if so, the proper measure of those damages.UN¢ln

18 18. Plaintiffs' claims are typical of the claims of other Class members.

f^l 19 Plaintiffs and the other Class members sustained damages arising out of

20 defendants' wrongful conduct.

21 19. Plaintiffs will fairly and adequately protect the interests of the

22 members of the Class and have retained counsel competent and experienced in

23 class actions and securities litigation. Plaintiffs have no interests antagonistic to

24 or in conflict with those of the Class.

25 20. Plaintiffs know of no difficulty that will be encountered in the

26 management of this litigation that would preclude its maintenance as a class

27 action.

28 21. The names and addresses of purchasers of WEATHERFORD stock

6. 5240. 301 Complaint for Violation of Federal Securities Laws[WP\110304 Complaint.wpd]


1 are available from WEATHERFORD's transfer agent and the underwriters.

2 Notice can be provided to such record owners via first class mail using technique

3 and form of notice similar to those customarily used in class actions.

4 MISLEADING STATEMENTS AND OMISSIONS

5 OF MATERIAL FACT

6 22. On March 1, 201 1, WEATHERFORD filed a Form 8-K with the SEC

7 which revealed that false and misleading statements had been made in Public

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8 Disclosures during the Class Period:

co 9 Because of the material weakness described below,(0

0 management concluded that, as of December 31, 2010,

6 10 our internal control over financial reporting for income

N taxes was not effective.z W LO

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z 0 — The Company's processes, procedures and controlsW Coll

N — 12 related to financial reporting were not effective to ensure0 ^

a- 0) that amounts related to current taxes payable, certain

G^ Z < 13 deferred tax assets and liabilities reserves for uncertain0 -J0 tax positions, the current and deferred income tax

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z 0 14 expense and related footnote disclosures were accurate.

LL Specifically, our processes and procedures were not

15 designed to provide for adequate and timelyW cr) 0 q

W 1r) identification and review of various income tax

16 calculations reconciliations and related supporting

N - W n documentation required to apply our accounting policiesZ (Io I —

< N 17 for income taxes in accordance with US GAAYz LO<

18 The principal factors contributing to the materialweakness were: 1) inadequate staffing and technical

19 expertise within the company related to taxes, 2)ineffective review and approval practices relating to

20 taxes, 3) inadequate processes to effectively reconcileincome tax accounts and 4) inadequate controls over the

21 preparation of quarterly tax provisions.

22 As a result of identifying the material weakness, weperformed additional testing o determine whether or not

23 the material weakness failed to identify an materialerrors in our accounting or income taxes. We have

24 substantially completed testing rocedures. Based onthese procedures, we have identifU errors, the

25 correction of which will be adjustments to our historicalfinancial statements and our 20 10 fourth quarter earnings

26 release, totaling approximately $500 million for theperiods from to 20 10. The amount for each year is

27 expected to range from $ 100 million to $150 million.

28 In addition to the above items, we expect to make

7. 5240. 301 Complaint for Violation of Federal Securities Laws[WP\l 10304 Complaintmpd]


1 adjustments to correct for immaterial items that had beenrecorded in the incorrect period, which we expect to

2 decrease net income by approximately $20 million in the

3aggregate for the years 2007 through 2010.

4 March 1, 2011, Form 8-K.

5 23. The misstatements made in the Public Disclosures were material on

6 several levels. First, they were material on the basis of the Generally Accepted

7 Accounting Principles treatment of materially as admitted by the company in the

8 Form 8-K filed on March 1, 2011.Oco 9 24. Second, the misstatements were material on WEATHERFORD's ownOp 10 admission, as evidenced in the 8-K where the Company identifies certainN

o W — LO 11 "immaterial items" that were "in addition to" the $400 million to $600 million oft= z O 1-

o>12 adjustments composing the expected range of restatements for the "periods from

a- ,^o J z .. 13 2007 to 2010." The characterization of the additional items as immaterial

> o o 14 indicated by inference that the $400 million to $600 million of expected

W Q 15 adjustments was material.U

Q16 25. Third, the misstatements were material in relation to and as aN — W ()Z n a N 17 percentage of the Net Income from Continuing Operations Attributable to►-^ zlnv N Q 18 Weatherford reported for the prior year periods from 2007 through 2010.

►^ 19 According to WEATHERFORD's 2009 Annual Report, the Net Income from

20 Continuing Operations Attributable to Weatherford was as follows: 2007 = $1.09

21 billion; 2008 = $1.41 billion; 2009 = $253.8 million. For 2010, the Press Release

22 dated January 25, 2011, indicated Net Income for the year 2010 totaled $24.5

23 million.

24 26. Fourth, the misstatements were material on the basis of economic loss

25 inflicted upon WEATHERFORD stock. Following the 8-K announcement, the

26 market price of WEATHERFORD stock plunged on by more than 10% from the

27 prior day's closing price $23.52 to close at $21.14 on March 2, 2011. This share

28 price decline represented a $1.775 billion decline in market capitalization of8.

5240.301 Complaint for violation of Federal Securities Laws[WP\110304 Complaintmpd]


1 WEATHERFORD.

2 DEFEND ,\\ TS' SCIENTER

3 27. The INDIVIDUAL DEFENDANTS were aware or should have been

4 aware at all times of the material adverse information concerning

5 WEATHERFORD.

6 28. Plaintiffs plead and allege with intent to prove at trial through expert

7 testimony that the "principal factors contributing to the material weakness were:

08 a. inadequate staffing and technical expertise within the company

co 9 related to taxes,(D0

10 b. ineffective review and approval practices relating to taxes,

z oIT0z W — LO 11 C. inadequate processes to effectively reconcile income tax accounts,

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z 0 14 were the result of gross negligence on the part of the INDIVIDUAL

15 DEFENDANTS.

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N—Z M< N 17 large holdings of WEATHERFORD stock and stock options owned by the

z LO< 18 INDIVIDUAL DEFENDANTS as follows:

19 a. DANNER owned approximately 2.189 million shares of

20 WEATHERFORD stock (approximately 1.2% of the outstanding) and held

21 beneficial Right to Acquire and additional 6.645 million shares via various

22 stock option plans.

23 b. BECNEL owned approximately 499,909 shares of WEATHERFORD

24 stock and held beneficial Right to Acquire and additional 1,008,620 shares

25 via various stock option plans.

26 C. Nicholas F. Brady owned approximately 879,264 shares of


28 5,679 shares via various stock option plans.9.

5240.301 Complaint for Violation of Federal Securities Laws[VYT\l 10304 Complaint.wpd]


1 d. David J. Butters owned approximately 236,188 shares of



4 e. William E. Macaulay owned approximately 770,932 shares of

5 WEATHER-FORD stock and held beneficial Right to Acquire and additional


7 f, Robert B. Millard owned approximately 1,312,458 shares of


(0OD 9 248,798 shares via various stock option plans.0

6 10 g. Robert K. Moses, Jr. owned approximately 566,464 shares ofN

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0 — 11 WEATHERFORD stock and held beneficial Right to Acquire and additional:) 0Z CO

It W 12 1 1,441 shares via various stock option plans.> N0 < 0)IL

v0Z^E<13 h. Robert A. Rayne owned approximately 160,316 shares of-1

Z 0 14 WEATHERFORD stock and held beneficial Right to Acquire and additionalLL

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< 501,767 shares via various stock option plans.W U) 0

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16 30. Plaintiff alleges the incentive to manipulate WEATHERFORD'sN - WZ CO T< CU 17 stock price placed the INDIVIDUAL DEFENDANTS in a wrongful state of mind

Cl) Z LOU NQ — 18 such that they were possessed of either intention or gross negligence which

19 resulted in the material misstatements described herein.

20 THE STATUTE OF LIMITATIONS WAS TOLLED

21 31. Plaintiffs were diligent in monitoring their investments in

22 WEATHERFORD shares at all times. At no time have there been any press

23 releases, news items, SEC filings or other publicly available information to

24 apprize plaintiffs of the adverse material facts giving rise to their claims herein.

25 32. At all times, Defendants withheld the facts evidencing the "principal

26 factors"and inadequacies that resulted in the expected restatements to earnings.

27 33. Plaintiffs could not possibly have discovered the truth regarding the

28 details of the claims herein. No publicly available information existed that could

10. 5240.301 Complaint for Violation of Federal Securities Laws

[VvT\l 10304 Complaint.wpd]


1 have led plaintiffs to know, or even suspect, that the defendants' had omitted to

2 state such important and material facts regarding these inadequacies.

3 34. Defendants continuously disseminated the false information at all

4 relevant times herein. Thus, the entire market had been deceived over the Class

5 Period as to the financial strength and investment desirability of

6 WEATHERFORD stock. Plaintiffs had no way of discovering the falsity of the

7 information related to WEATHERFORD at any time.

0

8 35. Therefore, the statute of limitations as to all of Plaintiffs' claims is

coo 9 tolled from the first quarter earning release on April 25, 2007, through the filing of

010 this Complaint. Plaintiffs diligently filed this complaint less than two years after

z W - Ln0 D 11 their discovery of the fraud and within five years of the date of the purchase of

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a^ Z < 13 INFLATED STOCK PRICE _j -U 0 z0 (rZ!. z 0 14 36. Because defendants overstated earnings by an estimated $400 million

W< qq 15 to $600 million for the period from 2007 through 2010, and also because of theLn ()

W ^ LO3: 2 Lo 16 related deficiencies in internal controls, the market price of WEATHERFORD

N — DZ M 1:6< < N 17 stock was artificially inflated. Had the negative information been disclosed, the

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18 market price of WEATHERFORD stock would have been much lower. Absent

19 the failure to disclose this negative information, plaintiffs would not have

20 purchased WEATHERFORD stock or warrants or they would have purchased

21 WEATHERFORD stock and warrants at a much lower price.

22 37. Based on the above-described misrepresentations and omissions it is

23 clear that the Plaintiffs paid an artificially inflated price for the WEATHERFORD

24 shares and warrants because defendants omitted to state material facts necessary to

25 make the public statements made by defendants not misleading.

26 38. Plaintiff Kanchanapoom, in his roll as trustte purchased 2,240 shares

27 of Weatherford stock (VY'FT) at $23.08 per share and holds the same today as of

28 the date of this complaint.

5240.301 Complaint for Violation of Federal Securities Laws[WP\1 10304 Complaintwpd]


I PRESUMPTION OF RELIANCE

2 39. Reliance should be presumed in this action for any claim asserted

3 which requires a showing of reliance. Plaintiffs are entitled to a presumption of

4 reliance under each of the following theories.

5 40. Fraud on the Regulatory Process - This theory was created by the 9th

6 Circuit in Arthur Young and Co. v. United States District Ct., 549 F.2d 686 (9th

7 Cir. 1976), cert. denied, (1977) 434 U.S. 829. WEATHERFORD misrepresented

08 to the SEC and to the public material facts concerning WEATHERFORD's

(0OD 9 financial strength and the integrity of its internal controls. The fraud on the06 10 Plaintiffs was also a fraud on numerous regulatory agencies, including the NewN

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LO0 11 York Stock Exchange and the Securities and Exchange Commission.D

ZoW12 41. The Affiliated Ute Presumption - in cases where the allegations of> N

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< O) t0-fr Z < 13 wrongdoing are primarily concerned with omissions, the presumption established-i -

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Z o o 14 by the U.S. Supreme Court in Affiliated Ute Citizens v. United States, (1972) 406

-j q 15 U.S. 128 applies. The allegations in this case, taken as a whole, primarily allege<W (n U q

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16 the omission of numerous material facts. As the Supreme Court explained,N— w0Z Co T< < N 17 requiring plaintiffs to describe how they would have behaved had the omitted

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18 information been disclosed places an unrealistic burden on plaintiffs.

19 FIRST CLAIM FOR RELIEF

W 20 Against All Defendants For Violation of

21 Section 10(b) of the Exchange Act and Rule 10b-5

22 of the Securities and Exchange Commission

23 42. Plaintiffs repeat and reallege each and every allegation contained in

24 the foregoing paragraphs as if fully set forth herein.

25 43. This Count is asserted against all Defendants and is based upon

26 Section 10(b) of the 1934 Act, 15 U.S.C. §78j(b), and Rule lOb-5 promulgated

27 thereunder.

28 44. At all relevant times herein, Defendants, singly and in concert,

12. 5240.301 Complaint for Violation of Federal Securities Laws

[WP\1 10304 Complaint.wpd]


1 directly engaged in a common plan, scheme, and unlawful course of conduct,

2 pursuant to which they knowingly or recklessly engaged in acts, transactions,

3 practices, and courses of business which operated as a fraud and deceit upon

4 plaintiffs and the other members of the Class, and failed to disclose material

5 information in order to make the statements made, in light of the circumstances

6 under which they were made, not misleading to plaintiffs and the other members

7 of the Class. The purpose and effect of said scheme, plan, and unlawful course of

O 8 conduct was, among other things, to induce plaintiffs and the other members of the

OD 9 Class to purchase securities in the period from April 25, 2007, through March 1,Op 10 2011.

o Z 0 11 45. At all relevant times, WEATHERFORD acted through its officers

oq W °N° 12 and directors. The willfulness, motive, knowledge, and recklessness ofa. 0)o J z 13 WEATHERFORD's officers and directors is therefore imputed to

^ o o 14 WEATHERFORD, rendering it primarily liable for the securities law violations of

115•W Q't 15 these defendants committed while performing in their official capacity asU

a3. 2 Lo 16 COMPANY representatives. In the alternative and additionally,N — W

Q c N 17 WEATHERFORD is liable for the acts of its officers and directors under thez In

v N Q 18 doctrine of respondent superior.

►^ 19 46. As a result of the failure to disclose material facts, the information

W 20 that Defendants disseminated to Plaintiffs was materially false and misleading as

21 set forth above. Plaintiffs would not have purchased any of the securities, but for

22 the omission of the above-detailed material adverse information. Moreover, the

23 price paid by Plaintiffs for the securities was artificially inflated as a result of the

24 material non-disclosures. In ignorance of the false and misleading nature of the

25 statements described above and the deceptive and manipulative devices and

26 contrivances employed by said defendants, plaintiffs and the other members of the

27 Class relied, to their detriment, on the integrity of the market price of the stock in

28 purchasing the securities. Had plaintiffs and the other members of the Class

13. 5240.301 Complaint for Violation of Federal Securities Laws[ 1AP\110304 Complaintmpd]


1 known the truth, they would not have purchased said shares and certainly would

2 not have purchased them at the inflated prices that were paid.

3 47. Plaintiffs and the other members of the Class have suffered

4 substantial damages as a result of the wrongs herein alleged in an amount to be

5 proved at trial.

6 48. By reason of the foregoing, Defendants directly violated Section

7 10(b) of the Exchange Act and Rule IOb-5 promulgated thereunder by: (a)

O8 employing devices, schemes, and artifices to defraud; (b) failing to disclose

co 9 material information; or (c) engaging in acts, practices, and a course of businessOp 10 which operated as a fraud and deceit upon plaintiffs and the other members of theN

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11 Class in connection with their purchases of the securities during the period from

o> °N° 12 April 25, 2007, through March 1, 2011.IL

vZ <13 49. This action is being brought within two years after the discovery of

z 0 14 the misleading statements and omissions and within five years after their issuance.

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VI 15 SECOND CLAIM FOR RELIEFI- w U LO

Q ^ 2 ,n 16 Against DANNER, BECNEL and the OUTSIDE DIRECTORS N — W

Z Q N 17 for Violation of Section 20(a) of the Exchange Actz LO

v N Q 18 50. Plaintiffs repeat and reallege each and every allegation contained in

►^ 19 each of the foregoing paragraphs as if set forth fully herein.

w 20 51. DANNER was Chairman of WEATHERFORD and BECNEL was

21 Senior Vice President of of WEATHERFORD. The OUTSIDE DIRECTORS

22 were all Directors on the Board of WEATHERFORD. By virtue of their

23 management positions, directorships, and stock ownership in WEATHERFORD

24 and/or specific acts described above, each was, at the time of the wrongs alleged

25 herein, a controlling person within the meaning of Section 20(a) of the 1934 Act.

26 52. By reason of the conduct alleged in Count I of the Complaint,

27 DANNER, BECNEL and the OUTSIDE DIRECTORS are liable for the aforesaid

28 wrongful conduct, and are liable to Plaintiffs and to the other members of the14.

5240.301 Complaint for Violation of Federal Securities Laws[WP\110304 Complaintmpd]


1 Class for the substantial damages which they suffered in connection with their

2 purchases of WEATHERFORD securities by Plaintiffs.

3 BASIS OF ALLEGATIONS

4 53. Plaintiffs have alleged the foregoing based upon the investigation of

5 their counsel, which included a review of WEATHERFORD's filings with the

6 SEC, news releases and other public disclosures.

7 54. Allegations regarding the contents of the SEC filings are based on a

08 review of those filings.

OD 9 JURY DE N I D (00

10 55. Plaintiffs demand a trial by jury.

z W LO0 D 11 P YER FOR RELIEF

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'ww CD 'q> N — 12 WHEREFORE, plaintiffs, on behalf of themselves and the Class, prays for<0)n

X -1Z < 13 judgment as follows:

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00 14 1. Declaring this action to be a proper plaintiff class action maintainablezF- 15 pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure and declaring

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7 Lo 16 plaintiffs to be proper representatives of the Class;N — FdZ T

< N 17 2. Awarding plaintiffs and other members of the Class damages togetherz LO< 18 with interest thereon;

19 3. Awarding plaintiffs and the other members of the Class their costs

20 and expenses in this litigation, including reasonable attorneys' fees and experts'

21 fees and other costs and disbursements; and

22 4. Awarding plaintiffs and the members of the Class such other and

23 further relief as may be just and proper under the circumstances.

24 DATED: March 3 2011. CATANZARITE AW CORPORATION25

26 By:

27 , anzaritePlaintiffs

28Atto rn- eys for Plaintiffs

15. 5240.301 Complaint for Violation of Federal Securities Laws[1AT\1 10304 Complaintmpd]

Documents

F ED 4 TE LAW CORPORATION P - Shareholders …shareholdersfoundation.com/system/files/complaints/...24 Weatherford International Ltd., a Swiss corporation. VvTEATHERFORD's shares 25