The Wall Street Journal-20080130-Judge Dismisses Lawsuit Against Omnicom

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Judge Dismisses Lawsuit Against Omnicom

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A federal judge dismissed a lawsuit against Omnicom Group Inc. over allegations it created a sham entity, Seneca Investments, in 2001 to avoid taking write-downs on its troubled Internet assets.

U.S. District Judge William H. Pauley III in the Southern District of New York granted the ad giant's summary judgment motion to dismiss the 2002 lawsuit, saying in part the plaintiffs failed to demonstrate that alleged misrepresentations by the company caused a loss to shareholders.

The suit alleged Seneca was created as a "paper transaction" that masked the true state of Omnicom's financial results. It alleged fraud came to light in June 2002 after the New York company announced its intent to buy back Web assets from Seneca and the resignation of Robert J. Callander, chairman of Omnicom's audit committee.

A lawyer for the New Orleans Employees' Retirement System, one of the lead plaintiffs, said they are "actively considering" an appeal.