Howard Wool v. Tandem Computers Incorporated, Robert C. Marshall, Henry v. Morgan, and James G. Treybig

This action was brought by appellant Howard Wool (“Wool”), on behalf of himself and a class of persons similarly situated, to recover damages for alleged fraud and breach of fiduciary duties in violation of, inter alia, federal securities laws and California common law.

The defendants are: Tandem Computers Incorporated (“Tandem”) and three individuals who served as Tandem officers during the relevant period — James G. Treybig (“Treybig”), Robert C. Marshall (“Marshall”), and Henry V. Morgan (“Morgan”). (Treybig, Marshall, and Morgan collectively: the “individual defendants.”)

In district court, Wool alleged that Tandem and the individual defendants had utilized improper accounting practices and issued public reports which overstated the profits of Tandem and which, in turn, artificially inflated the market price of Tandem securities. Wool and the class members purchased Tandem stock during the alleged inflation.

On April 30, 1985, the district court dismissed without prejudice Wool’s claim against the individual defendants. On July 24,1985, the remaining defendant, Tandem, filed a motion for summary judgment pursuant to Fed.R.Civ.P. 56. On September 11, 1985, the district court…