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Coca-Cola Co.

$51.48

+0.21%

Coca-Cola Co. agreed Thursday to settle a fraud lawsuit in which investors said they lost $1.75 billion after the soft drink maker withheld information to boost its stock price.

The $137.5 million settlement, filed Thursday in U.S. District Court in Atlanta, ended an eight-year battle.

"We maintain these allegations are without merit, and no admittance of wrongdoing is a part of this settlement," Coca-Cola said in an e-mailed statement. "At this time, we have determined that it is in the best interest of our business to close this matter and put this distraction behind us."

Investors claimed Japanese bottlers were forced to take excess syrup to boost sales, a practice called channel stuffing. The method helped Coca-Cola overstate income and artificially inflate its share price, according to the complaint filed by a union pension fund.

The company forced syrup sales "like a heroin addiction," plaintiffs lawyer Scott Saham told U.S. District Judge Willis Hunt during a hearing in August 2007.

Investors sued Coca-Cola in October 2000 after the company announced write-downs and after then-CEO Douglas Ivester left. The stock dropped 6.5 percent in December 1999 on news of Ivester's departure after less than two years. The company announced a $550 million charge in January 2000 to account for losing investments in Asia.

Company executives said in sealed depositions that the soft drink maker inflated sales in Japan in 1999 to meet Wall Street expectations, Saham told Hunt at a hearing last year.

Coca-Cola officials at the time said that the executives' statements had been mischaracterized.

Coca-Cola's "misstatements and omissions caused investors to suffer losses of as much as $11.79 per share," a former Federal Reserve economist contended.