NEW YORK, Nov. 19, 2004 – LAWFUEL – Class action, legal, law firm news –The law firm of Milberg Weiss Bershad & Schulman LLP announces that a class action lawsuit was filed today on behalf of all persons who purchased or otherwise acquired the securities of Tripath Technology, Inc. (“Tripath” or the “Company”) (Nasdaq:TRPH) between January 29, 2004 and October 22, 2004, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”). A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss’s website at: http://www.milbergweiss.com
The action is pending before in the United States District Court for the Northern District of California against defendants Tripath, Adya Tripathi (Chairman, CEO, and President), and David Eichler (CFO). According to the complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that Tripath is a semiconductor company that focuses on providing power amplification to the digital media consumer electronics and communications markets. The Company owns the patented technology called Digital Power Processing (DPP(R)) which leverages modern advances in digital signal processing and power processing in audio, DSL, and wireless communication products. Throughout the Class Period, Tripath reported quarter after quarter of record results in publicly disseminated press releases and SEC filings. Defendants attributed the results to the sale of its products and design wins (the selection of Tripath products for design into its customers’ new products) in the communications and home entertainment system markets. Unbeknownst to the Class, however, the Company’s seeming success was the result of improper accounting that artificially inflated Tripath’s reported results.
On October 22, 2004, after the market closed, Tripath disclosed in a press release and a concurrent SEC filing on Form 8-K that net revenues for the third quarter 2004 would be “significantly below prior guidance of $4 – $4.5 million” and that the Company’s net loss in the same period would be “significantly greater than previously anticipated.” Moreover, the Company disclosed that it was reviewing the return of $1.3 million in products to the Company’s distributor. The Company had already recognized as revenue proceeds from the sale of the products in the second quarter of 2004. The Company further announced it might need to restate its revenues for the second quarter 2004, and that its auditor, BDO Seidman, LLP, had resigned on October 18, 2004, citing “material weaknesses in Tripath’s internal controls concerning the effectiveness of Tripath’s Audit Committee and Tripath’s ability to estimate distributor sales returns in accordance with SFAS no. 48.” In reaction to this news, the price of Tripath common stock fell $0.75 per share, or 49%, from its closing price of $1.52 on October 22, 2004 to close at $0.77 per share on its next trading day, October 25, 2004. The closing price of Tripath shares on October 22, 2004 represented a $7.07, or 90%, decline from its Class Period high of $7.84 reached on January 29, 2004. Defendants were motivated to engage in this illegal and fraudulent scheme in order for Company insiders, including the defendants Tripathi and Eichler, to sell thousands of shares of their personally-held Tripath securities at artificially inflated prices, reaping over $2.1 million in proceeds.
If you purchased or otherwise acquired the securities of Tripath between January 29, 2004 and October 22, 2004, inclusive and sustained damages, you may, no later than January 4, 2005, request that the Court appoint you as lead plaintiff. 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 the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice, to serve as your counsel in this action.
Milberg Weiss Bershad & Schulman LLP (http://www.milbergweiss.com) is a firm with over 100 lawyers with offices in New York City, Los Angeles, Boca Raton, Delaware, Seattle and Washington D.C. and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others for nearly 40 years. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys:
Steven G. Schulman
Peter E. Seidman
Andrei V. Rado
One Pennsylvania Plaza, 49th fl.
New York, NY, 10119-0165
Phone number: (800) 320-5081