This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
A federal judge has tossed out a second shareholder lawsuit that stemmed from former Zagg Inc. CEO Robert Pedersen II's sudden sale of millions of dollars of shares in 2012.
Pedersen, who cofounded the Salt Lake City company that makes screen shields and other accessories for cell phones and tablets, was forced to resign in August of that year after selling shares to meet a margin call. Such a call is typically a demand by a broker for additional money from someone who bought shares with borrowed monies and used the stock as collateral.
Shareholders in a number of suits claimed Pedersen's actions harmed the value of their shares and sued him, the company and other company officials, accusing them of failing to follow federal disclosure requirements.
U.S. District Judge Dee Benson has dismissed the last of the lawsuits that had been consolidated into two cases.
Benson ruled last week that the shareholders had failed to show that directors intentionally misled investors and that he found no evidence that current CEO Randall Hales was hired as part of a "secret succession plan."
"This is a nice victory for Mr. Pedersen," said his attorney, Brent Baker. "He is looking forward to putting this in the past."
In February, Benson dismissed a class action lawsuit on behalf of investors. He found that Pedersen didn't knowingly mislead investors and that other officers didn't know of his activities before the margin calls.
Attorneys for shareholders have asked the 10th Circuit Court of Appeals in Denver to overturn Benson's decision in the class action lawsuit.