Mike Dobina, et al. v. Weatherford International, Inc., et...

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

MIKE DOBINA, Individually and on Behalf of CASE NO.All Others Similarly Situated,

Plaintiff, CLASS ACTION

v.COMPLAINT FOR VIOLATIONS OF

WEATHERFORD INTERNATIONAL LTD., THE FEDERAL SECURITIES LAWSBERNARD J. DUROC-DANNER, ANDREW P.BECNEL, JESSICA ABARCA and CHARLESE. GEER, JR.,

Defendants.

COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS

Plaintiff Mike Dobina, by and through his attorneys, alleges the following upon information

and belief, except as to those allegations concerning Plaintiff, which are alleged upon personal

knowledge. Plaintiff's information and belief is based upon, among other things, his counsel’s

investigation, which includes without limitation: (a) review and analysis of regulatory filings made

by Weatherford International Ltd. (“Weatherford” or the “Company”), with the United States

Securities and Exchange Commission (“SEC”); (b) review and analysis of press releases and media

reports issued by and disseminated by Weatherford; and (c) review of other publicly available

information concerning Weatherford.

NATURE OF THE ACTION AND OVERVIEW

1. This is a class action on behalf of purchasers of Weatherford’s securities between

April 25, 2007 and March 1, 2011, inclusive (the “Class Period”), seeking to pursue remedies under

the Securities Exchange Act of 1934 (the “Exchange Act”).

2. Weatherford provides equipment and services used in the drilling, evaluation,

completion, production, and intervention of oil and natural gas wells to independent oil and natural

gas producing companies worldwide.

3. On March 1, 2011, Weatherford disclosed that its previously issued financial

statements for the years ended December 31, 2007, 2008 and 2009 and for the quarterly periods

ended March 31, June 30 and September 30, 2010, should no longer be relied upon due to material

errors in the Company’s accounting for income taxes. Further, the Company announced that

Weatherford intended to restate its previously issued financial results for those periods. Moreover,

the Company informed investors that it estimated that the restatement would reduce its previously

reported net income by approximately $500 million, consisting of $460 million in errors relating to

intercompany amounts and another $40 million of errors relating to foreign tax assets.

4. On this news, shares of Weatherford declined $2.38 per share, nearly 11%, to close

on March 2, 2011, at $21.14 per share, on unusually heavy volume.

5. Throughout the Class Period, Defendants made false and/or misleading statements,

as well as failed to disclose material adverse facts about the Company's business, operations, and

COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS1

prospects. Specifically, Defendants made false and/or misleading statements and/or failed to

disclose: (1) that the Company had improperly accounted for income taxes relating to intercompany

amounts and foreign tax assets; (2) that, as a result, the Company’s financial results were materially

misstated during the Class Period; (3) that the Company’s financial results were not prepared in

accordance with Generally Accepted Accounting Principals (“GAAP”); (4) that the Company lacked

adequate internal and financial controls; and (5) that, as a result of the above, the Company’s

financial statements were materially false and misleading at all relevant times.

6. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline

in the market value of the Company’s securities, Plaintiff and other Class members have suffered

significant losses and damages.

JURISDICTION AND VENUE

7. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange Act

(15 U.S.C. §§78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R. §

240. 1 0b-5).

8. This Court has jurisdiction over the subject matter of this action pursuant to 28 U. S. C.

§1331 and Section 27 of the Exchange Act (15 U.S.C. §78aa).

9. Venue is proper in this Judicial District pursuant to §28 U.S.C. §1391(b) and §27 of

the Exchange Act (15 U.S.C. §78aa(c)). Substantial acts in furtherance of the alleged fraud or the

effects of the fraud have occurred in this Judicial District. Many of the acts charged herein,

including the preparation and dissemination of materially false and/or misleading information,

occurred in substantial part in this District.

10. In connection with the acts, transactions, and conduct alleged herein, Defendants

directly and indirectly used the means and instrumentalities of interstate commerce, including the

United States mail, interstate telephone communications, and the facilities of a national securities

exchange.

PARTIES

11. Plaintiff Mike Dobina, as set forth in the accompanying certification, incorporated


by reference herein, purchased Weatherford common stock during the Class Period, and suffered

damages as a result of the federal securities law violations and false and/or misleading statements

and/or material omissions alleged herein.

12. Defendant Weatherford is a corporation incorporated under the laws of Switzerland

with its principal executive offices located at 4-6 Rue Jean-Francois Bartholoni, 1204 Geneva,

Switzerland.

13. Defendant Bernard J. Duroc-Danner (“Duroc-Danner”) was, at all relevant times,

Chief Executive Officer (“CEO”) and a director of Weatherford.

14. Defendant Andrew P. Becnel (“Becnel”) was, at all relevant times, Chief Financial

Officer (“CFO”) and Senior Vice President of Weatherford.

15. Defendant Jessica Abarca (“Abarca”) was, at all relevant times, Chief Accounting

Officer and Vice President - Accounting of Weatherford.

16. Defendant Charles E. Geer, Jr. (“Geer”) was, at all relevant times, Vice President -

Financial Reporting of Weatherford.

17. Defendants Duroc-Danner, Becnel, Abarca and Geer are collectively referred to

hereinafter as the "Individual Defendants." The Individual Defendants, because of their positions

with the Company, possessed the power and authority to control the contents of Weatherford’s

reports to the SEC, press releases and presentations to securities analysts, money and portfolio

managers and institutional investors, i. e., the market. Each Defendant was provided with copies of

the Company’s reports and press releases alleged herein to be misleading prior to, or shortly after,

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available to

them, each of these Defendants knew that the adverse facts specified herein had not been disclosed

to, and were being concealed from, the public, and that the positive representations which were

being made were then materially false and/or misleading. The Individual Defendants are liable for

the false statements pleaded herein, as those statements were each "group-published" information,

the result of the collective actions of the Individual Defendants.


SUBSTANTIVE ALLEGATIONS

Background

18. Weatherford provides equipment and services used in the drilling, evaluation,

completion, production, and intervention of oil and natural gas wells to independent oil and natural

gas producing companies worldwide.

Materially False and MisleadingStatements Issued During the Class Period

19. The Class Period begins on April 25, 2007. On this day, the Company issued a press

release entitled, “Weatherford Reports First Quarter Results of $0.82 Per Diluted Share Before

Non-Recurring Items.” Therein, the Company, in relevant part, stated:

Record Performance; 44 Percent Increase Over Prior Year

HOUSTON, April 25 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported first quarter 2007 net income of $284.2 million fromcontinuing operations, or $0.82 per diluted share, before non-recurring items. Firstquarter diluted earnings per share reflected an improvement of 44 percent over thefirst quarter of 2006 diluted earnings per share of $0.57. The non-recurring items inthe first quarter of 2007 results include severance associated with the company’sfourth quarter exit and restructuring activities of $2.7 million, after tax.

First quarter revenues were $1,852.3 million, or 21 percent higher than the sameperiod last year, against a backdrop of a five percent increase in rig activity. This isthe highest level of quarterly revenues in the company’s history.

Sequentially, the company’s first quarter diluted earnings per share from continuingoperations improved eight percent over the record fourth quarter 2006 dilutedearnings per share of $0.76, before non-recurring items. The first quarterperformance reflected gains across nearly all of the company’s product and serviceofferings.

20. On May 7, 2007, Weatherford filed its Quarterly Report with the SEC on Form 10-Q

for the 2007 fiscal first quarter. The Company’s Form 10-Q was signed by Defendants

Duroc-Danner, Becnel and Abarca, and reaffirmed the Company’s financial results previously

announced on April 25, 2007. The Company’s Form 10-Q also contained Sarbanes-Oxley required

certifications, signed by Defendants Duroc-Danner and Becnel, who certified:

1. I have reviewed this Quarterly Report on Form 10-Q of WeatherfordInternational Ltd.;

2. Based on my knowledge, this report does not contain any untrue statementof a material fact or omit to state a material fact necessary to make the


statements made, in light of the circumstances under which such statementswere made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financialinformation included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant asof, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishingand maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for theregistrant and have:

(a) Designed such disclosure controls and procedures, or caused suchdisclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period inwhich this report is being prepared;

(b) Designed such internal control over financial reporting, or causedsuch internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generallyaccepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls andprocedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the endof the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal controlover financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the caseof an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control overfinancial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on ourmost recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board ofdirectors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design oroperation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record,process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management orother employees who have a significant role in the registrant’sinternal control over financial reporting.


21. On July 23, 2007, the Company issued a press release entitled, “Weatherford Reports

Second Quarter Income From Continuing Operations of $0.68 Per Diluted Share Before


HOUSTON, July 23 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported second quarter 2007 net income of $235.0 millionfrom continuing operations, or $0.68 per diluted share, before non-recurring items.Second quarter diluted earnings per share from continuing operations reflect animprovement of 28 percent over the second quarter of 2006 diluted earnings pershare from continuing operations of $0.53, before non-recurring items. Thenon-recurring items in the second quarter of 2007 results include severanceassociated with the company’s second quarter restructuring activities of $8.6 million,after tax, and $50.0 million of expense for withholding taxes on a distribution madeby the company to one of its foreign subsidiaries.

Second quarter revenues were $1,815.9 million, or 18 percent higher than the sameperiod last year, against a backdrop of a two percent increase in rig activity.

Sequentially, the company’s second quarter diluted earnings per share fromcontinuing operations were lower than the record first quarter 2007 diluted earningsper share from continuing operations of $0.83, before non-recurring items, primarilydue to an unusually severe seasonal downturn in the Canadian market.

In the first six months of 2007, revenues were $3.7 billion and income fromcontinuing operations before charges was $521.5 million, or $1.50 per diluted share.In 2006, the company reported revenues for the first six months of $3.1 billion andincome from continuing operations before charges of $396.8 million, or $1.11 perdiluted share.

22. On August 3, 2007, Weatherford filed its Quarterly Report with the SEC on Form

10-Q for the 2007 fiscal second quarter. The Company’s Form 10-Q was signed by Defendants


announced on July 23, 2007. The Company’s Form 10-Q also contained Sarbanes-Oxley required

certifications, signed by Defendants Duroc-Danner and Becnel, substantially similar to the

certifications contained in ¶ 20, supra.

23. On October 21, 2007, the Company issued a press release entitled, “Weatherford

Reports Third Quarter Income From Continuing Operations of $0.85 Per Diluted Share.” Therein,

the Company, in relevant part, stated:

HOUSTON, Oct. 21 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported third quarter 2007 income from continuing operationsof $294.9 million, or $0.85 per diluted share. Third quarter diluted earnings per sharefrom continuing operations reflect an improvement of 27 percent over the thirdquarter of 2006 diluted earnings per share from continuing operations of $0.67.


Third quarter revenues were $1,972.0 million, or 16 percent higher than the sameperiod last year, against a backdrop of flat rig count activity.

Sequentially, the company’s third quarter diluted earnings per share from continuingoperations were $0.17 higher than the second quarter 2007 diluted earnings per sharefrom continuing operations of $0.68, before non-recurring items.

In the first nine months of 2007, revenues were $5.6 billion and income fromcontinuing operations before non-recurring items was $816.4 million, or $2.35 perdiluted share. In 2006, the company reported revenues for the first nine months of$4.8 billion and income from continuing operations before non- recurring items of$633.0 million, or $1.77 per diluted share.

24. On November 1, 2007, Weatherford filed its Quarterly Report with the SEC on Form

10-Q for the 2007 fiscal third quarter. The Company’s Form 10-Q was signed by Defendants


announced on October 21, 2007. The Company’s Form 10-Q also contained Sarbanes-Oxley

required certifications, signed by Defendants Duroc-Danner and Becnel, substantially similar to the


25. On January 25, 2008, the Company issued a press release entitled, “Weatherford

Reports Fourth Quarter Income from Continuing Operations of $0.99 Per Diluted Share, Before


HOUSTON, Jan. 25 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported fourth quarter 2007 income from continuingoperations of $345 million, or $0.99 per diluted share, before non-recurring items.Fourth quarter diluted earnings per share from continuing operations reflect animprovement of 30 percent over the fourth quarter of 2006 diluted earnings per sharefrom continuing operations of $0.76, before non-recurring items. The non-recurringitem in the fourth quarter of 2007 results includes investigation and exit costsincurred in connection with the company’s exit from sanctioned countries.

Fourth quarter revenues were $2,192 million, or 21 percent higher than the sameperiod last year, against a backdrop of a two percent increase in rig count activity.This is the highest level of quarterly revenues in the company’s history.

Sequentially, the company’s fourth quarter diluted earnings per share fromcontinuing operations were $0.13 higher than the third quarter 2007 diluted earningsper share from continuing operations of $0.86, before non-recurring items.

For the twelve months ended December 31, 2007, revenues were $7.8 billion andincome from continuing operations before non-recurring items was $1,164 million,or $3.35 per diluted share. In 2006, the company reported revenues of $6.6 billionand income from continuing operations before non- recurring items of $900 million,or $2.54 per diluted share.


26. On February 21, 2008, Weatherford filed its Annual Report with the SEC on Form

10-K for the 2007 fiscal year. The Company’s Form 10-K was signed by Defendant Duroc-Danner

and reaffirmed the Company’s financial results previously announced on January 25, 2008. The

Company’s Form 10-K also contained Sarbanes-Oxley required certifications, signed by Defendants

Duroc-Danner and Becnel, substantially similar to the certifications contained in ¶ 20, supra.

27. On April 21, 2008, the Company issued a press release entitled, “Weatherford

Reports First Quarter Income from Continuing Operations of $1.01 Per Diluted Share, Before

Non-Recurring Items; Announces Two-for-One Share Split.” Therein, the Company, in relevant

part, stated:

HOUSTON, April 21 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported first quarter 2008 income from continuing operationsof $351 million, or $1.01 per diluted share, before non-recurring items. First quarterdiluted earnings per share from continuing operations reflect an improvement of 22percent over the first quarter of 2007 diluted earnings per share from continuingoperations of $0.83, before non-recurring items. The non-recurring items in the firstquarter of 2008 results include costs incurred in connection with the company’s exitfrom sanctioned countries and related government investigation expense andseverance charges associated with reorganization activities.

First quarter revenues were $2,196 million, or 19 percent higher than the same periodlast year, against a backdrop of a four percent increase in rig count activity. This isthe highest level of quarterly revenue in the company’s history.

Sequentially, the company’s first quarter diluted earnings per share from continuingoperations, before non-recurring items, were $0.02 higher than the fourth quarter2007 diluted earnings per share from continuing operations of $0.99, beforenon-recurring items.








Second Quarter Income from Continuing Operations of $0.43 Per Diluted Share, Before



HOUSTON, July 21 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported second quarter 2008 income from continuingoperations of $300 million, or $0.43 per diluted share, excluding an after tax gainfrom non-recurring items of $0.09. Second quarter diluted earnings per share fromcontinuing operations reflect an improvement of 26 percent over the second quarterof 2007 diluted earnings per share from continuing operations of $0.34, beforenon-recurring items. The non-recurring items in the second quarter of 2008 resultsinclude a gain on the restructuring of a Qatar operation into a JV, partially offset byinvestigation and exit costs incurred in connection with the company’s withdrawalfrom sanctioned countries.

Second quarter revenues were $2,229 million, or 23 percent higher than the sameperiod last year, against a backdrop of a seven percent increase in rig count activity.This is the highest level of quarterly revenue in the company’s history.

Sequentially, the company’s second quarter diluted earnings per share fromcontinuing operations, before non-recurring items, were $0.07 lower than the firstquarter 2008 diluted earnings per share from continuing operations of $0.50, beforenon-recurring items, due to the seasonal decline in Canadian activity, which was onlypartially offset by improvements in other geographic markets.

In the first six months of 2008, revenues were $4.4 billion and income fromcontinuing operations before charges was $650.7 million, or $0.93 per diluted share.In 2007, the company reported revenues for the first six months of $3.7 billion andincome from continuing operations before charges of $521.5 million, or $0.75 perdiluted share.








Reports Third Quarter Income From Continuing Operations of $0.55 Per Diluted Share, Before


HOUSTON, Oct. 20 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported third quarter 2008 income from continuing operationsof $384 million, or $0.55 per diluted share, excluding an after tax loss fromnon-recurring items of $0.02. Third quarter diluted earnings per share fromcontinuing operations reflect an improvement of 28 percent over the third quarter of2007 diluted earnings per share from continuing operations of $0.43, beforenon-recurring items. The non-recurring items in the third quarter of 2008 resultsinclude investigation and exit costs incurred in connection with the company’swithdrawal from sanctioned countries.


Third quarter revenues were $2,541 million, or 29 percent higher than the sameperiod last year, against a backdrop of an 11 percent increase in rig count activity.This is the highest level of quarterly revenue in the company’s history.

Sequentially, the company’s third quarter diluted earnings per share from continuingoperations, before non-recurring items, were $0.12 higher than the second quarter2008 diluted earnings per share from continuing operations of $0.43, beforenon-recurring items.

In the first nine months of 2008, revenues were $7.0 billion and income fromcontinuing operations before non-recurring items was $1,035 million, or $1.48 perdiluted share. In 2007, the company reported revenues for the first nine months of$5.6 billion and income from continuing operations before non-recurring items of$819 million, or $1.18 per diluted share.








Reports Fourth Quarter Income from Continuing Operations of $0.53 Per Diluted Share, Before


HOUSTON, Jan. 26 /PRNewswire-FirstCall/ -- Weatherford International Ltd.(NYSE: WFT) today reported fourth quarter 2008 income from continuingoperations of $364 million, or $0.53 per diluted share, excluding an after tax loss of$0.03 for investigation and exit costs incurred in connection with the company’swithdrawal from sanctioned countries. Fourth quarter diluted earnings per share fromcontinuing operations reflect an improvement of eight percent over the fourth quarterof 2007 diluted earnings per share from continuing operations of $0.49, beforenon-recurring items.

Fourth quarter revenues were $2,635 million, or 20 percent higher than the sameperiod last year, against a backdrop of an 8 percent increase in rig count activity.This is the highest level of quarterly revenue in the company’s history.

Sequentially, the company’s fourth quarter diluted earnings per share fromcontinuing operations, before non-recurring items, were $0.02 lower than the thirdquarter 2008 diluted earnings per share from continuing operations of $0.55, beforenon-recurring items. Fourth quarter results of operations include a loss of $0.04 centsper diluted share for declines in the value of foreign-denominated assets due tomovements in exchange rates and $0.03 cents per diluted share for asset write offsand facility moving costs. In addition, pullbacks in North America and Russia, aswell as the unfavorable impact of a stronger U.S. dollar, generated headwinds torevenue and operating income growth.


For the year ended December 31, 2008, revenues were $9.6 billion, 23% higher than2007, and income from continuing operations before non-recurring items was $1,399million, or $2.00 per diluted share, an increase of 20% from 2007. In 2007, thecompany reported revenues for the year of $7.8 billion and income from continuingoperations before non-recurring items of $1,164 million, or $1.67 per diluted share.







Reports First Quarter Results.” Therein, the Company, in relevant part, stated:

SWITZERLAND, April 20 /PRNewswire-FirstCall/ -- Weatherford InternationalLtd. (NYSE: WFT) today reported first quarter 2009 income from continuingoperations of $186 million, or $0.27 per diluted share, excluding an after tax loss of$0.04 for investigation and exit costs incurred in connection with the company’swithdrawal from sanctioned countries and severance costs principally associatedwith restructuring activities in North America. First quarter diluted earnings pershare from continuing operations reflect a decrease of 46 percent over the firstquarter of 2008 diluted earnings per share from continuing operations of $0.50,before non-recurring items, mainly due to a sharp drop off in customer activity inNorth America.

First quarter revenues were $2,256 million, or three percent higher than the sameperiod last year, against a backdrop of a 19 percent decrease in global rig count.While North America revenue declined 23 percent, in line with a 27 percent declinein rig count, international revenue was up 28 percent against a two percent decreasein international rig count. Company-wide revenue was negatively impacted byapproximately $160 million due to the relative strengthening of the U.S. dollarcompared to the year-ago period.

Sequentially, the company’s first quarter diluted earnings per share from continuingoperations, before non-recurring items, were $0.26 lower than the fourth quarter2008 diluted earnings per share from continuing operations of $0.53, beforenon-recurring items. This decline was principally due to the abrupt curtailment ofNorth American activity during the first three months of 2009.









Second Quarter Results.” Therein, the Company, in relevant part, stated:

GENEVA, July 20, 2009 /PRNewswire-FirstCall via COMTEX/ -- WeatherfordInternational Ltd. (NYSE: WFT) today reported second quarter 2009 income fromcontinuing operations of $69 million, or $0.10 per diluted share, excluding an aftertax loss of $0.04 for investigation and exit costs incurred in connection with thecompany’s withdrawal from sanctioned countries and severance costs principallyassociated with restructuring activities. Second quarter diluted earnings per sharefrom continuing operations reflect a decrease of 77 percent over the second quarterof 2008 diluted earnings per share from continuing operations of $0.43, beforenon-recurring items, mainly due to a combination of record low seasonal activity inCanada and greater than anticipated pricing declines in both the United States andCanada.

Second quarter revenues were $1,995 million, or 11 percent lower than the sameperiod last year, against a backdrop of a 35 percent decrease in global rig count.North America was responsible for the decline with revenues decreasing 44 percentagainst a 50 percent decline in rig count. International revenues were up 17 percentagainst a nine percent decrease in international rig count.

Sequentially, the company’s second quarter diluted earnings per share fromcontinuing operations, before non-recurring items, were $0.17 lower than the firstquarter of 2009 diluted earnings per share from continuing operations of $0.27,before non-recurring items. This decline was principally due to the continuedcurtailment of North American activity during the second quarter of 2009.








Reports Third Quarter Results.” Therein, the Company, in relevant part, stated:

GENEVA, Oct 19, 2009 /PRNewswire-FirstCall via COMTEX/ -- WeatherfordInternational Ltd. (NYSE: WFT) today reported third quarter 2009 income fromcontinuing operations of $93 million, or $0.13 per diluted share, excluding an aftertax loss of $0.02 for investigation and exit costs incurred in connection with thecompany’s withdrawal from sanctioned countries and severance costs principallyassociated with restructuring activities. Third quarter diluted earnings per share fromcontinuing operations reflect a decrease of 76 percent over the third quarter of 2008diluted earnings per share from continuing operations of $0.55, before severance andinvestigation costs. Results for the third quarter include a tax benefit of


approximately $0.05 resulting from the lowering of the company’s estimate of itseffective tax rate, as well as a negative $0.02 impact from higher losses on foreigncurrency remeasurement and the settlement of a legal dispute. In addition, thirdquarter results include a gain of $27 million recorded pursuant to Statement ofFinancial Accounting Standards No. 141(R), Business Combinations, in connectionwith the revaluation of contingent consideration associated with an acquisition. Thisfinancial item was mostly offset by other adjustments going both ways.

Third quarter revenues were $2,150 million, or 15 percent lower than the sameperiod last year, against a backdrop of a 39 percent decrease in global rig count.North America was primarily responsible for the decline, with revenues decreasing47 percent against a 52 percent decline in rig count. International revenues were up12 percent against an 11 percent decrease in international rig count.

Sequentially, the company’s third quarter diluted earnings per share from continuingoperations, before severance and investigation costs, were $0.03 higher than thesecond quarter of 2009 diluted earnings per share from continuing operations of$0.10, before severance and investigation costs.








Reports Fourth Quarter Results.” Therein, the Company, in relevant part, stated:

GENEVA, Jan 25, 2010 /PRNewswire via COMTEX/ -- Weatherford InternationalLtd. (NYSE: WFT) today reported fourth quarter 2009 income from continuingoperations of $15 million, or $0.02 per diluted share, excluding an after tax loss of$0.06 for investigation and exit costs incurred in connection with the company’swithdrawal from sanctioned countries, severance costs principally associated withrestructuring activities and a tax provision related to a legal entity reorganization.Fourth quarter diluted earnings per share from continuing operations reflect adecrease of 96 percent over the fourth quarter of 2008 diluted earnings per sharefrom continuing operations of $0.53, before severance and investigation costs. Fourthquarter results include the following items:

* $21 million in inventory reserves and write-offs;* $12 million in expenses associated with business process and supply chain

improvement projects, which will be ongoing for the next nine quarters;* An $8 million legal charge regarding settlement of a multi-year dispute;* $4 million of expenses incurred in connection with the completion of the

company’s global tax reorganization during the fourth quarter; and* A $3 million net gain on acquisition and divestiture activities

Fourth quarter revenues were $2,426 million, or eight percent lower than the same


period last year, against a backdrop of a 29 percent decrease in global rig count.North America was primarily responsible for the decline, with revenues decreasing37 percent against a 40 percent decline in rig count. International revenues were up16 percent against an eight percent decrease in international rig count.

Sequentially, the company’s fourth quarter diluted earnings per share fromcontinuing operations, before severance, reorganization and investigation costs, were$0.11 lower than the third quarter of 2009 diluted earnings per share from continuingoperations of $0.13, before severance and investigation costs.

For the year ended December 31, 2009, revenues were $8.8 billion, eight percentlower than 2008, and income from continuing operations before severance,reorganization and investigation costs was $364 million, or $0.50 per diluted share,a decrease of 75 percent from 2008. In 2008, the company reported revenues for theyear of $9.6 billion and income from continuing operations of $1,399 million, or$2.00 per diluted share, before non-recurring items. The non-recurring items during2008 were primarily for investigation and exit costs incurred in connection with thecompany’s withdrawal from sanctioned countries, which were partially offset by again on the restructuring of a Qatar operation into a JV.







Reports First Quarter Results.” Therein, the Company, in relevant part, stated:

GENEVA, April 20, 2010 /PRNewswire via COMTEX/ --Weatherford InternationalLtd. (NYSE: WFT) today reported first quarter 2010 income of $41 million, or $0.06per diluted share, excluding an after tax loss of $0.11 per diluted share. The excludedafter tax loss was comprised of a $40 million charge related to the devaluation of theVenezuelan Bolivar, a $38 million charge related to the company’s supplementalexecutive retirement plan that was frozen on March 31, 2010 and severance andinvestigation costs. Included in the $0.06 result were $15 million of non-cash chargesrelated to write-offs at a less-than-majority owned subsidiary and a fair valueadjustment to the put option issued in connection with the TNK-BP acquisition. Firstquarter diluted earnings per share reflect a decrease of 78 percent over the firstquarter of 2009 diluted earnings per share of $0.27, before severance andinvestigation costs.

First quarter revenues were $2,338 million, or four percent higher than the sameperiod last year, against a backdrop of a six percent increase in global rig count.International revenues were up two percent against a three percent increase ininternational rig count compared to the first quarter of 2009. Comparing the sameperiods, North America revenue was up six percent against a seven percent increasein rig count.

Sequentially, the company’s first quarter diluted earnings per share, before charges,


were $0.04 higher than the fourth quarter of 2009 diluted earnings per share of $0.02,before severance and investigation costs.








Second Quarter Results. Therein, the Company, in relevant part, stated:

GENEVA, July 20, 2010 /PRNewswire via COMTEX/ --Weatherford InternationalLtd. (NYSE: WFT) today reported second quarter 2010 income of $80 million, or$0.11 per diluted share, excluding an after tax loss of $0.15 per diluted share. Theexcluded after tax loss was comprised of an $82 million non-cash charge for a fairvalue adjustment to the put option issued in connection with the TNK-BP acquisitionand $24 million, net of tax, for severance and investigation costs. Second quarterdiluted earnings per share reflect an increase of ten percent over the second quarterof 2009 diluted earnings per share of $0.10, before severance and investigation costs.

Second quarter revenues were $2,438 million, or 22 percent higher than the sameperiod last year, and four percent higher than the prior quarter. Segment operatingincome of $308 million improved 14 percent year-over-year and 16 percentsequentially. International revenues were up seven percent versus the year agoquarter and five percent versus the prior quarter. Eastern Hemisphere revenuescarried the international growth rate, increasing 16 percent versus the year agoquarter and nine percent versus the prior quarter, while Latin America revenue fell12% compared to the year ago quarter and four percent sequentially due to lowerproject activity in Mexico. North America revenue increased 61 percent versus theyear ago quarter and grew three percent versus the prior quarter. Strongerperformance in the U.S. land market more than offset Canada’s traditional seasonaldecline and one month of severely reduced activity in the Gulf of Mexico.

Sequentially, the company’s second quarter diluted earnings per share, beforecharges, were $0.04 higher than the first quarter of 2010 diluted earnings per shareof $0.07, before severance, investigation costs and fair value adjustment for the putoption.

Weatherford Chairman and CEO Bernard J. Duroc-Danner commented, "The secondquarter was progress with the United States and Russia singled out as the highestperformers. The outlook for North America appears constructive. Client feedbackleads us to believe that operators are planning to accelerate activity in internationalmarkets."




Duroc-Danner, Becnel and Geer, and reaffirmed the Company’s financial results previously





Reports Third Quarter Results of $0.18 Per Share.” Therein, the Company, in relevant part, stated:

GENEVA, Switzerland, Oct 18, 2010 /PRNewswire via COMTEX/ --WeatherfordInternational Ltd. (NYSE: WFT) today reported third quarter 2010 income of $132million, or $0.18 per diluted share, excluding an after tax gain of $0.01 per dilutedshare. The excluded after tax gain includes the following items:

* $90 million benefit for a fair value adjustment to the put option issued inconnection with the TNK-BP acquisition;

* $54 million charge, net of tax, for revisions to the company’s profitabilityestimates on project management contracts in Mexico due to severecurtailment of client spending and activity;

* $14 million for severance and restructuring costs;* $7 million charge for premiums paid on a public bond tender; and* $3 million of costs in connection with our government investigations.

Third quarter diluted earnings per share reflect an increase of 100 percent over thethird quarter of 2009 diluted earnings per share of $0.09, before severance,investigation costs and fair value adjustment for the put option.

Sequentially, the company’s third quarter diluted earnings per share, before chargesand the fair value adjustment to the put option, were $0.07 higher than the secondquarter of 2010 diluted earnings per share of $0.11, before severance, investigationcosts and fair value adjustment for the put option.

Third quarter revenues were $2,534 million, or 18 percent higher than the sameperiod last year, and four percent higher than the prior quarter. Segment operatingincome of $372 million improved 59 percent year-over-year and 21 percentsequentially. International revenues were down six percent versus the year agoquarter and down five percent versus the prior quarter. Latin America was the driverof the international decline with revenues decreasing 3 6 percent versus the year agoquarter and 18 percent versus the prior quarter, while Eastern Hemisphere revenuesincreased nine percent versus the year ago quarter and were essentially flat versusthe prior quarter. North America revenue increased 77 percent versus the year agoquarter and grew 19 percent versus the prior quarter.

The North American land market and strong gains in Russia led to improvedperformance during the quarter. By product line artificial lift and drilling servicesproduct lines continued to provide superlative results. Sequential earnings growth thelast three quarters lead the company to believe that the fourth quarter and 2011 willcontinue to show additional improvement. A return to improved market conditionsin Mexico and the Middle East coupled with continued strength in North America,South America and Russia should drive improved results through 2011. Thecompany expects earnings per share before excluded items of $0.23 in the fourthquarter and $1.30 in 2011. Expected improvements in Q4 should be nearly evenly


split between North America and International markets, with a $0.01 offset forincreased interest expense.



Duroc-Danner, Becnel and Geer, and reaffirmed the Company’s financial results previously





Reports Fourth Quarter Results of $0.21 Per Share Before Charges, Primarily Tax Reorganization

and Bond Tender Premiums.” Therein, the Company, in relevant part, stated:

GENEVA, Jan. 25, 2011 /PRNewswire via COMTEX/ -- Weatherford InternationalLtd. (NYSE / SIX: WFT) today reported fourth quarter 2010 income of $156 million,or $0.21 per diluted share, excluding an after tax loss of $210 million. The excludedafter tax loss is comprised of the following items:

* $158 million book tax expense primarily incurred in connection with a taxreorganization to migrate Latin America operations out of the U.S. holdingstructure during the quarter to further strengthen global tax planning efforts.Of this amount, $54 million was a cash charge;

* $34 million in bond tender premiums paid for the extinguishment of a portionof senior notes due in 2012 and 2013;

* $21 million after-tax reserve taken against Venezuelan account receivablesin light of the country’s economic prognosis;

* $12 million in after-tax severance related to restructuring initiatives; and* $15 million after-tax gain related to the November 2010 settlement of the

TNK-BP put option which settled below the fair value liability recorded inthe prior quarter.

The company incurred no net costs related to the government investigations.

Fourth quarter diluted earnings per share reflect an increase of $0.18 over the fourthquarter of 2009 diluted earnings per share of $0.03, before charges and fair valueadjustment for the put option.

Sequentially, the company’s fourth quarter diluted earnings per share, before chargesand the fair value adjustment to the put option, were $0.03 higher than the thirdquarter of 2010.

Fourth quarter revenues of $2,901 million were the highest in company history andproduced the highest quarterly sequential growth rate in the recent past. Revenueswere 20 percent higher than the same period last year, and 14 percent higher than theprior quarter. International revenues were up 15 percent versus the prior quarter.Eastern Hemisphere revenues increased ten percent sequentially and 13 percentversus the year ago quarter, while North America revenue increased 14 percent and


70 percent, respectively, over the same period. Integrated Drilling, CompletionSystems, Drilling Services, Stimulation and Chemicals, and Artificial Lift productlines posted strong sequential growth for the company.

Segment operating income of $421 million improved 89 percent year-over-year and13 percent sequentially. Margin performance was held back primarily due to assetwrite-offs, particularly in the Eastern Hemisphere, as well as unfavorable weatherconditions in Australia. Asset write-offs, principally on inventory, totaled $50million during the quarter and negatively impacted earnings per share byapproximately $0.05.

The company expects earnings per share before excluded items of $0.27 in the firstquarter of 2011 and $1.30 for the full year 2011. The outlook for the internationalmarkets in 2011 is constructive, as supported by this quarter’s healthy improvementin international revenues. The pace of recovery is expected to accelerate throughoutthe year and gain further momentum in 2012.

50. The statements contained in ¶¶ 19-49, were materially false and/or misleading when

made because defendants failed to disclose or indicate the following: Throughout the Class Period,

Defendants made false and/or misleading statements, as well as failed to disclose material adverse

facts about the Company’s business, operations, and prospects. Specifically, Defendants made false

and/or misleading statements and/or failed to disclose: (1) that the Company had improperly

accounted for income taxes relating to intercompany amounts and foreign tax assets; (2) that, as a

result, the Company’s financial results were materially misstated during the Class Period; (3) that

the Company’s financial results were not prepared in accordance with GAAP; (4) that the Company

lacked adequate internal and financial controls; and (5) that, as a result of the above, the Company’s

financial statements were materially false and misleading at all relevant times.

Disclosures at the End of the Class Period

51. On March 1, 2011, Weatherford filed a Current Report with the SEC on Form 8-K.

Therein, the Company, in relevant part, stated:

Item 2.02. Results of Operations and Financial Condition.

As a result of identifying the material weakness described in Item 4.02(a) below, weperformed additional testing to determine whether or not the material weaknessfailed to identify any material errors in our accounting for income taxes. Based onthese procedures, we identified the errors set forth in Item 4.02(a), the correction ofwhich will be adjustments to our historical financial statements and our 2010 fourthquarter earnings release. As described below, these errors and the associatedadjustments relate almost exclusively to taxes. While we have substantiallycompleted our procedures, these amounts may vary based upon finalizing ourprocedures. The adjustments set forth in Item 4.02(a) are incorporated by reference


in this Item 2.02.

* * *

Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or aRelated Audit Report or Completed Interim Review.

On March 1, 2011, we filed a Form 12b-25 Notification of Late Filing advising thatour Annual Report on Form 10-K for the year ended December 31, 2010 (our “Form10-K”) will not be filed by March 1, 2011. The reason for not filing by March 1,2011 relates to the identification of a material weakness in internal control overfinancial reporting for income taxes and the amount of time required to performadditional testing on, and reconciliation of, the tax accounts.

Based on our additional testing of our internal control over financial reporting, weidentified certain errors, further described below, the correction of which will beadjustments to our historical financial statements and our 2010 fourth quarterearnings release. While we have substantially completed our procedures, theseamounts may vary based upon finalizing our procedures. These corrections, oncefinalized, will be reflected in our Form 10-K when it is filed.

During management’s assessment of the effectiveness of the Company’s internalcontrol over financial reporting as of December 31, 2010, management identified amaterial weakness in the Company’s internal control over financial reporting forincome taxes. A material weakness is a deficiency, or a combination of deficiencies,in internal control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the annual or interim financial statements will not beprevented or detected on a timely basis. In making this assessment, our managementused the criteria set forth by the Committee of Sponsoring Organizations of theTreadway Commission in Internal Control—An Integrated Framework (September1992). Because of the material weakness described below, management concludedthat, as of December 31, 2010, our internal control over financial reporting forincome taxes was not effective.

The Company’s processes, procedures and controls related to financial reportingwere not effective to ensure that amounts related to current taxes payable, certaindeferred tax assets and liabilities, reserves for uncertain tax positions, the current anddeferred income tax expense and related footnote disclosures were accurate.Specifically, our processes and procedures were not designed to provide for adequateand timely identification and review of various income tax calculations,reconciliations and related supporting documentation required to apply ouraccounting policies for income taxes in accordance with US GAAP.

The principal factors contributing to the material weakness were: 1) inadequatestaffing and technical expertise within the company related to taxes, 2) ineffectivereview and approval practices relating to taxes, 3) inadequate processes to effectivelyreconcile income tax accounts and 4) inadequate controls over the preparation ofquarterly tax provisions.

As a result of identifying the material weakness, we performed additional testing todetermine whether or not the material weakness failed to identify any material errorsin our accounting for income taxes. We have substantially completed the testingprocedures. Based on these procedures, we have identified errors, the correction ofwhich will be adjustments to our historical financial statements and our 2010 fourthquarter earnings release, totaling approximately $500 million for the periods from


2007 to 2010. The amount for each year is expected to range from $100 million to$150 million.

Approximately $460 million of these adjustments relate to an error in determiningthe tax consequences of intercompany amounts over multiple years. These errorshave no impact on previously reported operating cash flow.

In addition to the above items, we expect to make adjustments to correct forimmaterial items that had been recorded in the incorrect period, which we expect todecrease net income by approximately $20 million in the aggregate for the years2007 through 2010.

As a result of the estimated adjustments described above, the Audit Committee ofour Board of Directors determined on February 28, 2011 that our previously issuedfinancial statements for the years ended December 31, 2007, 2008 and 2009 and forthe quarterly periods ended March 31, June 30 and September 30, 2010, should nolonger be relied upon. Our Audit Committee has discussed the matters describedabove with our independent auditors.

The above estimated adjustments may vary as a result of completing our testingprocedures. We expect to complete our testing procedures, finalize the restatementof our financial statements for 2010 and prior years and file our Form 10-K withinthe time period allowed by Rule 12b-25 (15 days).

52. On March 2, 2011, the Company held a conference call with investors, analysts, and

other market participants, to discuss the Company’s SEC filing disclosing that Weatherford was

going to restate its historical financial results. Defendants Duroc-Danner, Becnel and Geer were

present. Therein, Defendant Becnal, in relevant part, stated the following:

Yesterday evening, we filed a notice of late filing and a Form 8-K advising that ourAnnual Report on Form 10-K would not be filed by yesterday’s statutory due date.The reason for postponing the filing relates to the existence of a material weaknessin our internal controls related to income taxes and the subsequent testing of ourincome tax accounts, which resulted in the identification of errors in these accounts.

As a result of our assessment of internal controls this year, we concluded that we willhave a material weakness in our internal control over financial reporting, specificallyrelated to income taxes. Material weakness is a term [of art]. It is a deficiency orcombination of deficiencies in internal control over financial reporting such thatthere is a reasonable possibility that a material misstatement of the financialstatements would not be prevented or detected on a timely basis.

The existence of the material weakness with respect to internal controls for financialreporting for income taxes led to the need to perform additional testing on andreconciliation of the tax accounts. The purpose of the testing was to determinewhether or not the material weakness failed to identify any material errors in ouraccounting for income taxes.

We have substantially completed the testing procedures and have identified errors,the correction of which will be adjustments to our historical financial statements andour 2010 Q4 earnings release. These errors totaled approximately $500 million forthe periods from 2007 to 2010. The amount of the expected adjustment for each of


the four years is expected to range from $100 million to $150 million.

The $500 million of errors consist of two parts. First, approximately $460 millionrelates to an error in determining the tax consequences of intercompany amountsover multiple years. The error manifested itself in 2007 and went undetected in thatyear and each subsequent year. As a result, the error repeated itself in each year. Wemistakenly tax-affected certain intercompany amounts and booked a tax asset as aresult. These assets will be written off.

Second, an additional $40 million approximately constitute corrections to foreign taxassets. An example of this could be assessing collectability of a prepaid tax in aforeign jurisdiction. This is an example only.

53. On this news, shares of Weatherford declined $2.38 per share, 10.92%, to close on

March 2, 2011, at $21.14 per share, on unusually heavy volume.

WEATHERFORD’S VIOLATION OF GAAP RULESIN ITS FINANCIAL STATEMENTS

FILED WITH THE SEC

54. These financial statements and the statements about the Company’s financial results

were false and misleading, as such financial information was not prepared in conformity with

GAAP, nor was the financial information a fair presentation of the Company’s operations due to the

Company’s improper accounting for, and disclosure about its income taxes, in violation of GAAP

rules.

55. GAAP are those principles recognized by the accounting profession as the

conventions, rules and procedures necessary to define accepted accounting practice at a particular

time. Regulation S-X (17 C.F.R. § 210.4 01(a) (1)) states that financial statements filed with the SEC

which are not prepared in compliance with GAAP are presumed to be misleading and inaccurate.

Regulation S-X requires that interim financial statements must also comply with GAAP, with the

exception that interim financial statements need not include disclosure which would be duplicative

of disclosures accompanying annual financial statements. 17 C.F.R. § 210.10-01(a).

56. The fact that Weatherford has announced that it intends to restate its financial

statements and informed investors that these financial statements should not be relied upon is an

admission that they were false and misleading when originally issued (APB No.20, 7-13; SFAS No.

154, 25).

57. Given these accounting irregularities, the Company announced financial results that


were in violation of GAAP and the following principles:

(a) The principle that "interim financial reporting should be based upon the same

accounting principles and practices used to prepare annual financial statements" was violated (APB

No. 28, 10);

(b) The principle that "financial reporting should provide information that is

useful to present to potential investors and creditors and other users in making rational investment,

credit, and similar decisions" was violated (FASB Statement of Concepts No. 1, 34);

(c) The principle that "financial reporting should provide information about the

economic resources of an enterprise, the claims to those resources, and effects of transactions,

events, and circumstances that change resources and claims to those resources" was violated (FASB

Statement of Concepts No. 1, 40);

(d) The principle that "financial reporting should provide information about an

enterprise’s financial performance during a period" was violated (FASB Statement of Concepts No.

1, 42);

(e) The principle that "financial reporting should provide information about how

management of an enterprise has discharged its stewardship responsibility to owners (stockholders)

for the use of enterprise resources entrusted to it" was violated (FASB Statement of Concepts No.

1, 50);

(f) The principle that "financial reporting should be reliable in that it represents

what it purports to represent" was violated (FASB Statement of Concepts No. 2, 58-59);

(g) The principle that "completeness, meaning that nothing is left out of the

information that may be necessary to insure that it validly represents underlying events and

conditions" was violated (FASB Statement of Concepts No. 2, 79); and

(h) The principle that "conservatism be used as a prudent reaction to uncertainty

to try to ensure that uncertainties and risks inherent in business situations are adequately considered"

was violated (FASB Statement of Concepts No. 2, 95).

58. The adverse information concealed by Defendants during the Class Period and

detailed above was in violation of Item 303 of Regulation S-K under the federal securities law (17


C.F.R. §229.303).

CLASS ACTION ALLEGATIONS

59. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased Weatherford’s

securities between April 25, 2007 and March 1, 2011, inclusive (the "Class Period"), and who were

damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers and directors

of the Company, at all relevant times, members of their immediate families and their legal

representatives, heirs, successors or assigns and any entity in which Defendants have or had a

controlling interest.

60. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, Weatherford’s securities were actively traded on New

York Stock Exchange ("NYSE"). While the exact number of Class members is unknown to Plaintiff

at this time and can only be ascertained through appropriate discovery, Plaintiff believes that there

are hundreds or thousands of members in the proposed Class. Millions of Weatherford shares were

traded publicly during the Class Period on the NYSE and as of October 25, 2010, Weatherford had

741,424,789 shares of common stock outstanding. Record owners and other members of the Class

may be identified from records maintained by Weatherford or its transfer agent and may be notified

of the pendency of this action by mail, using the form of notice similar to that customarily used in

securities class actions.

61. Plaintiff’s claims are typical of the claims of the members of the Class as all members

of the Class are similarly affected by Defendants’ wrongful conduct in violation of federal law that

is complained of herein.

62. Plaintiff will fairly and adequately protect the interests of the members of the Class

and has retained counsel competent and experienced in class and securities litigation.

63. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) Whether the federal securities laws were violated by Defendants’ acts as


alleged herein;

(b) Whether statements made by Defendants to the investing public during the

Class Period omitted and/or misrepresented material facts about the business, operations, and

prospects of Weatherford; and

(c) To what extent the members of the Class have sustained damages and the

proper measure of damages.

64. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

damages suffered by individual Class members may be relatively small, the expense and burden of

individual litigation makes it impossible for members of the Class to individually redress the wrongs

done to them. There will be no difficulty in the management of this action as a class action.

UNDISCLOSED ADVERSE FACTS

65. The market for Weatherford’s securities was open, well-developed and efficient at

all relevant times. As a result of these materially false and/or misleading statements, and/or failures

to disclose, Weatherford’s securities traded at artificially inflated prices during the Class Period.

Plaintiff and other members of the Class purchased or otherwise acquired Weatherford’s securities

relying upon the integrity of the market price of the Company’s securities and market information

relating to Weatherford, and have been damaged thereby.

66. During the Class Period, Defendants materially misled the investing public, thereby

inflating the price of Weatherford’s securities, by publicly issuing false and/or misleading statements

and/or omitting to disclose material facts necessary to make Defendants’ statements, as set forth

herein, not false and/or misleading. Said statements and omissions were materially false and/or

misleading in that they failed to disclose material adverse information and/or misrepresented the

truth about Weatherford’s business, operations, and prospects as alleged herein.

67. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false and/or misleading


statements about Weatherford’s financial well-being and prospects. These material misstatements

and/or omissions had the cause and effect of creating in the market an unrealistically positive

assessment of the Company and its financial well-being and prospects, thus causing the Company’s

securities to be overvalued and artificially inflated at all relevant times. Defendants’ materially false

and/or misleading statements during the Class Period resulted in Plaintiff and other members of the

Class purchasing the Company’s securities at artificially inflated prices, thus causing the damages

complained of herein.

LOSS CAUSATION

68. Defendants’ wrongful conduct, as alleged herein, directly and proximately caused

the economic loss suffered by Plaintiff and the Class.

69. During the Class Period, Plaintiff and the Class purchased Weatherford’s securities

at artificially inflated prices and were damaged thereby. The price of the Company’s securities

significantly declined when the misrepresentations made to the market, and/or the information

alleged herein to have been concealed from the market, and/or the effects thereof, were revealed,

causing investors’s losses.

SCIENTER ALLEGATIONS

70. As alleged herein, Defendants acted with scienter in that Defendants knew that the

public documents and statements issued or disseminated in the name of the Company were

materially false and/or misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced in

the issuance or dissemination of such statements or documents as primary violations of the federal

securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their receipt of

information reflecting the true facts regarding Weatherford, his/her control over, and/or receipt

and/or modification of Weatherford’s allegedly materially misleading misstatements and/or their

associations with the Company which made them privy to confidential proprietary information

concerning Weatherford, participated in the fraudulent scheme alleged herein.

APPLICABILITY OF PRESUMPTION OF RELIANCE(FRAUD-ON-THE-MARKET DOCTRINE)


71. The market for Weatherford’s securities was open, well-developed and efficient at

all relevant times. As a result of the materially false and/or misleading statements and/or failures

to disclose, Weatherford’s securities traded at artificially inflated prices during the Class Period.

On June 30, 2008, the closing price of the Company’s common stock reached a Class Period high

of $49.59 per share. Plaintiff and other members of the Class purchased or otherwise acquired the

Company’s securities relying upon the integrity of the market price of Weatherford’s securities and

market information relating to Weatherford, and have been damaged thereby.

72. During the Class Period, the artificial inflation of Weatherford’s stock was caused

by the material misrepresentations and/or omissions particularized in this Complaint causing the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false and/or misleading

statements about Weatherford’s business, prospects, and operations. These material misstatements

and/or omissions created an unrealistically positive assessment of Weatherford and its business,

operations, and prospects, thus causing the price of the Company’s securities to be artificially

inflated at all relevant times, and when disclosed, negatively affected the value of the Company

stock. Defendants’ materially false and/or misleading statements during the Class Period resulted

in Plaintiff and other members of the Class purchasing the Company’s securities at such artificially

inflated prices, and each of them has been damaged as a result.

73. At all relevant times, the market for Weatherford’s securities was an efficient market

for the following reasons, among others:

(a) Weatherford stock met the requirements for listing, and was listed and

actively traded on the NYSE, a highly efficient and automated market;

(b) As a regulated issuer, Weatherford filed periodic public reports with the SEC

and the NYSE;

(c) Weatherford regularly communicated with public investors via established

market communication mechanisms, including through regular dissemination of press releases on

the national circuits of major newswire services and through other wide-ranging public disclosures,

such as communications with the financial press and other similar reporting services; and


(d) Weatherford was followed by securities analysts employed by major

brokerage firms who wrote reports about the Company, and these reports were distributed to the

sales force and certain customers of their respective brokerage firms. Each of these reports was

publicly available and entered the public marketplace.

74. As a result of the foregoing, the market for Weatherford’s securities promptly

digested current information regarding Weatherford from all publicly available sources and reflected

such information in Weatherford’s stock price. Under these circumstances, all purchasers of

Weatherford’s securities during the Class Period suffered similar injury through their purchase of

Weatherford’s securities at artificially inflated prices and a presumption of reliance applies.

NO SAFE HARBOR

75. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint. The

statements alleged to be false and misleading herein all relate to then-existing facts and conditions.

In addition, to the extent certain of the statements alleged to be false may be characterized as

forward looking, they were not identified as “forward-looking statements” when made and there

were no meaningful cautionary statements identifying important factors that could cause actual

results to differ materially from those in the purportedly forward-looking statements. In the

alternative, to the extent that the statutory safe harbor is determined to apply to any forward-looking

statements pleaded herein, Defendants are liable for those false forward-looking statements because

at the time each of those forward-looking statements was made, the speaker had actual knowledge

that the forward-looking statement was materially false or misleading, and/or the forward-looking

statement was authorized or approved by an executive officer of Weatherford who knew that the

statement was false when made.

FIRST CLAIMViolation of Section 10(b) of

The Exchange Act and Rule 10b-5Promulgated Thereunder Against All Defendants

76. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.


77. During the Class Period, Defendants carried out a plan, scheme and course of conduct

which was intended to and, throughout the Class Period, did: (i) deceive the investing public,

including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and other

members of the Class to purchase Weatherford’s securities at artificially inflated prices. In

furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them, took

the actions set forth herein.

78. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made untrue

statements of material fact and/or omitted to state material facts necessary to make the statements

not misleading; and (iii) engaged in acts, practices, and a course of business which operated as a

fraud and deceit upon the purchasers of the Company’s securities in an effort to maintain artificially

high market prices for Weatherford’s securities in violation of Section 10(b) of the Exchange Act

and Rule 1 0b-5. All Defendants are sued either as primary participants in the wrongful and illegal

conduct charged herein or as controlling persons as alleged below.

79. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about Weatherford’s financial

well-being and prospects, as specified herein.

80. These Defendants employed devices, schemes and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a course

of conduct as alleged herein in an effort to assure investors of Weatherford’s value and performance

and continued substantial growth, which included the making of, or the participation in the making

of, untrue statements of material facts and/or omitting to state material facts necessary in order to

make the statements made about Weatherford and its business operations and future prospects in

light of the circumstances under which they were made, not misleading, as set forth more

particularly herein, and engaged in transactions, practices and a course of business which operated

as a fraud and deceit upon the purchasers of the Company’s securities during the Class Period.

81. Each of the Individual Defendants’ primary liability, and controlling person liability,

arises from the following facts: (i) the Individual Defendants were high-level executives and/or


directors at the Company during the Class Period and members of the Company’s management team

or had control thereof; (ii) each of these defendants, by virtue of their responsibilities and activities

as a senior officer and/or director of the Company, was privy to and participated in the creation,

development and reporting of the Company’s internal budgets, plans, projections and/or reports; (iii)

each of these defendants enjoyed significant personal contact and familiarity with the other

defendants and was advised of, and had access to, other members of the Company’s management

team, internal reports and other data and information about the Company’s finances, operations, and

sales at all relevant times; and (iv) each of these defendants was aware of the Company’s

dissemination of information to the investing public which they knew and/or recklessly disregarded

was materially false and misleading.

82. The Defendants had actual knowledge of the misrepresentations and/or omissions of

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to

ascertain and to disclose such facts, even though such facts were available to them. Such

Defendants’ material misrepresentations and/or omissions were done knowingly or recklessly and

for the purpose and effect of concealing Weatherford’s financial well-being and prospects from the

investing public and supporting the artificially inflated price of its securities. As demonstrated by

Defendants’ overstatements and/or misstatements of the Company’s business, operations, financial

well-being, and prospects throughout the Class Period, Defendants, if they did not have actual

knowledge of the misrepresentations and/or omissions alleged, were reckless in failing to obtain

such knowledge by deliberately refraining from taking those steps necessary to discover whether

those statements were false or misleading.

83. As a result of the dissemination of the materially false and/or misleading information

and/or failure to disclose material facts, as set forth above, the market price of Weatherford’s

securities was artificially inflated during the Class Period. In ignorance of the fact that market prices

of the Company’s securities were artificially inflated, and relying directly or indirectly on the false

and misleading statements made by Defendants, or upon the integrity of the market in which the

securities trades, and/or in the absence of material adverse information that was known to or

recklessly disregarded by Defendants, but not disclosed in public statements by Defendants during


the Class Period, Plaintiff and the other members of the Class acquired Weatherford’s securities

during the Class Period at artificially high prices and were damaged thereby.

84. At the time of said misrepresentations and/or omissions, Plaintiff and other members

of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the other

members of the Class and the marketplace known the truth regarding the problems that Weatherford

was experiencing, which were not disclosed by Defendants, Plaintiff and other members of the Class

would not have purchased or otherwise acquired their Weatherford securities, or, if they had

acquired such securities during the Class Period, they would not have done so at the artificially

inflated prices which they paid.

85. By virtue of the foregoing, Defendants have violated Section 10(b) of the Exchange

Act and Rule 1 0b-5 promulgated thereunder.

86. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the

other members of the Class suffered damages in connection with their respective purchases and sales

of the Company’s securities during the Class Period.

SECOND CLAIMViolation of Section 20(a) of

The Exchange Act Against the Individual Defendants

87. Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.

88. The Individual Defendants acted as controlling persons of Weatherford within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company’s operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had the

power to influence and control and did influence and control, directly or indirectly, the

decision-making of the Company, including the content and dissemination of the various statements

which Plaintiff contends are false and misleading. The Individual Defendants were provided with

or had unlimited access to copies of the Company’s reports, press releases, public filings and other

statements alleged by Plaintiff to be misleading prior to and/or shortly after these statements were


issued and had the ability to prevent the issuance of the statements or cause the statements to be

corrected.

89. In particular, each of these Defendants had direct and supervisory involvement in the

day-to-day operations of the Company and, therefore, is presumed to have had the power to control

or influence the particular transactions giving rise to the securities violations as alleged herein, and

exercised the same.

90. As set forth above, Weatherford and the Individual Defendants each violated Section

10(b) and Rule 1 0b-5 by their acts and/or omissions as alleged in this Complaint. By virtue of their

positions as controlling persons, the Individual Defendants are liable pursuant to Section 20(a) of

the Exchange Act. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

other members of the Class suffered damages in connection with their purchases of the Company’s

securities during the Class Period.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure;

(b) Awarding compensatory damages in favor of Plaintiff and the other Class members

against all defendants, jointly and severally, for all damages sustained as a result of Defendants’

wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in this

action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

DATED: March 8, 2011 GLANCY BINKOW & GOLDBERG LLP

Jala Amsellem (NY Bar # 2084895)Lionel Z. GlancyMichael GoldbergRobert V. Prongay


1801 Avenue of the Stars, Suite 311Los Angeles, California 90067Telephone: (310) 201-9150Facsimile: (310) 201-9160

-and-

GLANCY BINKOW & GOLDBERG LLP1430 Broadway, #1603New York, NY 10018Telephone: (212) 382-2221Facsimile: (212) 382-3944

LAW OFFICES OF HOWARD G. SMITHHoward G. Smith3070 Bristol Pike, Suite 112Bensalem, PA 19020Telephone: (215) 638-4847Facsimile: (215) 638-4867

Attorneys for Plaintiff Mike Dobina


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