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Case ID: 3512 | Stocks | 08/19/2004
The parties have reached a $1.35 million settlement in an administrative proceeding filed by the SEC against certain former officers and directors of software company First Virtual Communications, Inc., (Nasdaq: FVCXE) on behalf of stockholders who purchased the company's common stock between January 28, 1999, and April 6, 1999. The action claimed that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. Claim forms must be postmarked on or before September 21, 2004, to be considered valid.
The lawsuit named three former senior executives of FVC, alleging that they caused the company to announce overstated revenues and earnings so they could sell their FVC shares before issuance of the correct financial information. The defendants are FVC's current Chairman of the Board and former President and CEO, Ralph K. Ungermann; its former CFO, James O. Mitchell; and its former Vice President of Sales, Alan J. McMillan. Since 1993, FVC, a Silicon Valley technology company, headquartered in Santa Clara, California, has engineered and manufactured video-conferencing products and, through independent distributors, marketed and sold these products to the ultimate customer. FVC's common stock traded on Nasdaq's National Market from April 1998 through August 8, 2002, when it started trading on Nasdaq's small cap market. The complaint alleged that, in order to meet revenue goals for the fourth quarter and year end 1998, FVC entered into an agreement with its largest distributor in which the distributor agreed to buy $3 million of FVC product in exchange for FVC's agreement to grant the distributor various return rights on the $3 million of FVC product and on product FVC had previously sold to the distributor. FVC improperly recognized as revenue approximately $5.9 million in sales that were subject to the return rights, in violation of Generally Accepted Accounting Principles. The complaint alleges that, as a result of the defendants' actions, in its January 28, 1999, earnings release, FVC overstated its fourth quarter revenue by 114% and annual revenue by 16% and announced annual earnings of $1.1 million instead of a loss of $2 million. The complaint also alleges that Ungermann, Mitchell, and McMillan failed to disclose this agreement to FVC's auditors, even when specifically asked. The complaint further alleges that, after its February 1999 earnings release, the defendants sold a total of 330,000 shares of FVC stock, reaping illegal trading profits. In April 1999, after the auditors learned of the return rights that FVC had granted, FVC filed an annual report on Form 10-K that correctly reported FVC's fourth quarter and annual revenue and earnings. After the announcement of FVC's correct financial results, FVC's stock price dropped 60%. In a related enforcement action, the Commission ordered FVC to cease and desist from violating the antifraud (Section 10(b) of the Exchange Act and Rule 10b-5 thereunder) and record-keeping provisions (Section 13(b)(2)(A) of the Exchange Act) of the federal securities laws. The Commission's order found that FVC materially overstated its revenues and earnings for the fourth quarter and year end December 1998 in the January 28, 1999 press release by improperly recognizing revenue from sales with various return rights. FVC, without admitting or denying the Commission's findings, consented to the order to cease and desist.
At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest According to the Notice of Voluntary Dismissal signed by Judge Gerard E. Lynch on April 18, 2008, the case has been dismissed without prejudice as to defendants JP Morgan Chase & Co. and J.P. Morgan Securities, Inc.
A securities class action lawsuit was commenced in the United States District Court for the District of Minnesota, on behalf of all persons who purchased Gander Mountain Company securities ("Gander Mountain" or the "Company") (NASDAQ: GMTN) pursuant to the Company's Registration Statement/Prospectus for its Initial Public Offering ("IPO") and on behalf of those who purchased their shares in the open market between April 20, 2004 and January 13, 2005, inclusive (the "Class Period"). A class action has been filed the Federal National Mortgage Corporation (Fannie Mae) (NYSE: FNM_PK) and certain of its officers and directors by stockholders who purchased the company’s common stock between January 13, 2000 and September 22, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. According to a law firm press release, on May 12, 2008 a class action lawsuit on behalf of persons who purchased Auction Rate Securities from RBC Dain Rauscher Inc., Royal Bank of Canada, and RBC Capital Markets Corporation between May 12, 2003 and February 13, 2008 (the “Class Period”), and who continued to hold such securities as of February 13, 2008. The class action is brought against Royal Bank of Canada and its wholly-owned subsidiaries, RBC Dain Rauscher Inc. and RBC Capital Markets Corporation. The Complaint alleges that RBC Dain Rauscher violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which these securities traded. Auction rate securities are either municipal or corporate debt securities or preferred stocks which pay interest at rates set at periodic “auctions.” Auction rate securities generally have long-term maturities or no maturity dates.
Stericycle, Inc., the leading provider in North America of medical waste management and compliance services for the healthcare community, announced today that it has entered into a preliminary settlement to resolve a pending class action lawsuit by the minority shareholders of Stericycle's publicly traded majority-owned subsidiary, 3CI Complete Compliance Corporation, and by 3CI. The settlement remains subject to court approval. A class action has been filed against 51job, Inc. (NASDAQ: JOBS), a China based recruitment and human resource services company and certain of its officers and directors by stockholders who purchased the company's common stock between November 4th, 2004 and January 14th, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. |
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