Stockholders v Wireless Facilities, Inc. (2004)
Wireless Facilities Admits to Burgeoning Foreign Tax Liabilities
Several class actions have been filed against communications and security systems engineering specialists Wireless Facilities, Inc. (Nasdaq:WFII), and certain of its officers and directors by stockholders who purchased the company's common stock between April 26, 2000, and August 4, 2004. The actions claim 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.
The action alleges that the defendants intentionally failed to disclose or misrepresented the following material adverse facts: (1) that Wireless had substantially under-reported its burgeoning foreign tax burden; (2) the company materially inflated its net income by 3% to 8% ($10-12 million); and (3) the company lacked adequate internal controls and was therefore unable to ascertain its true financial condition.
On August 4, 2004, Wireless reported results for the second quarter of fiscal year 2004. At that time, the company announced that it intends to restate its Form 10-K financial statements for the years 2001 through 2003 to account for certain foreign tax contingencies. On this news, Wireless shares fell as much as 30%. On August 5, 2004, shares bottomed out at their 52-week low of $4.61 per share on unusually heavy trading volume.
If you purchased securities issued by Wireless Facilities during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 4, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.
