Judge Throws Out EMI SoundScan-Fraud Allegations

A U.S. District Court judge has dismissed a claim by Avatar Records that EMI hired marketing consultants in an attempt to inflate Nielsen SoundScan numbers. The indie label had alleged that the EMI-pa

A U.S. District Court judge has dismissed a claim by Avatar Records that EMI hired marketing consultants in an attempt to inflate Nielsen SoundScan numbers. The indie label had alleged that the EMI-paid consultants arranged for fradulent scans of music products at independent retail outlets as part of a distribution deal between the two companies.

In a May 5 ruling, Judge Victor Marrero of the U.S. District Court for the Southern District of New York stated that Avatar "fails to put forward sufficient evidence to support that charge."

"Avatar presents no documentation of actual sales of Avatar Records or allegedly inflated sales, nor does Avatar present evidence from any individual who was asked by the particular marketing consultant to produce an inflated sales report," Marrero said in the ruling.

Marrero also found Avatar liable for damages stemming from EMI's suit against Avatar for its failure to pay EMI more than $1.1 million owed under an EMI distribution contract.

As previously reported, the allegation surfaced as part of a breach-of-contract lawsuit between EMI and Avatar. Avatar claimed that EMI forced it to pay $10,000 for a marketing consultant who bribed music retailers to report inflated record sales.

EMI denied the claim as a "red-herring attempt to divert from the fact that Avatar owes EMI in excess of $1 million."

Avatar executives could not be reached for comment.
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