October 28, 2013 (Shareholders Foundation) - An investor in shares of Verizon Communications Inc. (NYSE:VZ) filed a lawsuit against directors of Verizon Communications Inc. over alleged breaches of fiduciary duties that led to $50 million in refunds and a $25 million payment to the U.S. Treasury.
The plaintiff says that Verizon Communications Inc was under a 10-month regulatory investigation for allegedly charging between $1.99 $1.99 up into the hundreds of dollars for data access even if the phones were turned off, drained of battery power or had Internet access blocked. In a 2010 consent decree with the U.S. Federal Communications Commission Verizon Communications Inc agreed to pay $52.8 million in customer refunds and a $25 million voluntary payment.

However, the plaintiff claims Verizon Communications Inc. misrepresented the extent of overcharging and that what it claimed would be a 'full refund' was seriously understated.

The plaintiff says that certain directors and officers of Verizon Communications Inc. knew or should have known of this misrepresentation to the U.S. Federal Communications Commission and the public and that certain directors and officers of Verizon Communications Inc allegedly exposed the company to U.S. Federal Communications Commission administrative sanctions up to and including license revocation, as well as to reputational harm.

Verizon Communications Inc. reported that its annual Total Revenue rose from over $106.56 billion in 2010 to over $115.84 billion in 2012 while its Net Income declined from over $2.54 billion in 2010 to $875 million in 2012.

Shares of Verizon Communications Inc. (NYSE:VZ) grew from $27.21 per share in June 2010 to as high as $53.63 per share in April 2013.

On October 28, 2103, NYSE:VZ shares closed at $50.57 per share.