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EA's 'Puffery' Means Partial Victory in Battlefield 4 Fraud Case

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By William Peacock, Esq. on October 23, 2014 10:19 AM

We covered the train wreck that was the launch of Battlefield 4 by gaming company Electronic Arts last year: Despite loads of hype and a ton of pre-release awards at the E3 industry tradeshow, the game's release was an unmitigated disaster. Servers crashed, the game was plagued with glitches, online play was nearly unplayable. The issues weren't sorted out for months, other projects were delayed as a result, and sales across the board suffered.

A lawsuit was unsurprising, but the issue wasn't the glitchy game (at least not directly). Instead, stockholders sued over the company's allegedly misleading statements, claiming that EA defrauded investors while insiders sold off their shares of company stock. Unfortunately for the current plaintiffs, their case was as inadequate as Battlefield 4 was.

However, it's not game over yet: An amended complaint could revive some of the claims.

Fraud or Puffery?

In their complaint, the plaintiffs mentioned eight statements that they argued were misstatements that amounted to fraud on the market. However, U.S. District Judge Susan Illston held that the statements were mere puffery or statements of corporate confidence, reports Courthouse News Service.

"Defendant [CFO Blake] Jorgensen's Oct. 29, 2013 statement comparing 'BF4' to a World Series ace pitcher is puffery," Illston wrote. "Defendant Wilson's Oct. 29, 2013 statement explaining that EA 'worked more closely with Microsoft and Sony throughout the entire process' resulting in a 'launch slate of games that are the best transition games that I've ever seen come out of this company' is an inactionable opinion, as well as a vague statement of corporate optimism."

Do You Wish to Continue?

Much like video games give you a do-over when you fail, the case against EA isn't completely dead. EA pointed out to the court that five of the eight statements listed in the complaint were made after the named plaintiffs had already purchased their stock.

Judge Illston is giving the investors a shot at amending their complaint, assuming they can find lead plaintiffs who bought their stock based on the misstatements and did so after the statements were made.

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