Mississippi Pension Fund Sues Seagate for Deception Following $300M Export Fine

Investors in Mississippi's public employees' retirement system sued Seagate Technology Holdings for deceiving its investors and causing them to buy Seagate stock at "artificially inflated prices" related to its conduct in illegally exporting hard disk drives to China. (Public Employees' Retirement System of Mississippi v. Seagate Technology Holdings, N.D. Cal. # 3:23-03711).

The Mississippi pension fund filed a two-count suit on July 26 in the U.S. District Court for the Northern District of California, alleging that Seagate deceived its investors and caused the fund to buy the company's stock at false prices. The fund also named two Seagate executives, William Mosley and Gianluca Romano, claiming that the pair had the power to control Seagate's actions, making them liable for the resulting damage caused by the company.

The complaint alleges that Seagate "engaged and participated in a continuous course of conduct to conceal adverse material information about the Company’s financial well-being, operations, and prospects."

In April, BIS hit Seagate with a $300 million civil penalty for violating the ban on hard disk drives sales to Huawei. The agency said that from 2020 to 2021, Seagate sold 7.4 million units of the drives to Huawei, valued at more than $1.1 billion. The fine was the largest in BIS history (see 2304190071).