Cybersource wants Madison County class action to vanish
Engineer Brian Wilgus, class representative in a class action suit over stock options, has asked Madison County Circuit Judge Daniel Stack not to throw out his suit just because he did not exercise the options.
Attorney Howard Becker of Korein Tillery in St. Louis wrote to Stack that, "…an option holder does not need to attempt to exercise options when an attempt to do so would be futile."
Becker wrote that when a defendant causes a plaintiff's failure to exercise options, "…that defendant cannot benefit from its own wrongdoing."
Wilgus leads a class of about 75 persons who worked for PaylinX Corporation when it merged with CyberSource Corporation, in 2000.
PaylinX, a private company, designed software for credit card transactions. CyberSource, a public company, helps to process Internet transactions.
According to Wilgus the merger provided valuable stock options that CyberSource rendered worthless by delaying their exercise while share prices plunged.
CyberSource attorney Alan Goldstein of St. Louis moved in August for summary judgment, arguing that Wilgus did not exercise his options and owned no shares.
Goldstein wrote that Wilgus could not have sold shares when he claimed he would have in any event, because CyberSource imposed a blackout to prevent illegal insider trades.
In October Becker delivered a 783 page response. He began with 31 pages of argument and attached six depositions, five e-mails, a CyberSource personnel summary, a school schedule, option records and a Yahoo stock price history.
He argued that the trading blackout should not have applied to former PaylinX employees because they possessed no inside information.
He asked, "Why was the blackout really imposed?"
"Was this just another attempt by CyberSource to thwart plaintiffs' abilities to exercise their options until the market price of CyberSource common stock plummeted?"
He wrote that former PaylinX employees could have bought shares at $7.50 and sold them at $12.88.
Assuming that Wilgus would have sold 7,500 shares, Becker wrote, the delay cost him a profit of $40,350.
"The unrealized profit which was clearly available to plaintiffs are the damages alleged," he wrote.
Stack has set a hearing Nov. 29.