Judge Rejects Suit by Emulex Investors

A judge tossed out a shareholder lawsuit against Bloomberg and Internet Wire Inc., saying they were not to blame for relying on a fake news release to publish a story that caused dramatic moves in the stock of Costa Mesa-based Emulex.

U.S. District Judge Milton Pollack concluded that Bloomberg and Internet Wire were victims of a plot by former Internet Wire employee Mark Simeon Jakob to benefit from the sudden move in price.

The Manhattan judge said even the lawsuit filed by Emulex shareholders “reveals that defendants were used as unwitting dupes by Jakob,” who made money by selling the stock short. “This does not give rise to a securities fraud claim against them,” the judge said. A lawyer for the shareholders, Jeffrey Nobel, said attorneys are studying the ruling.