PHILADELPHIA, Dec. 9 2004 – LAWFUEL – First with law news — The law firm of Spector, Roseman & Kodroff, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the Northern District of California,
on behalf of purchasers of the common stock of UTStarcom, Inc. (“UTStarcom” or
the “Company”) (Nasdaq: UTSI) between April 16, 2003 through September 20,
2004, inclusive (the “Class Period”).
The Complaint alleges that defendants violated the federal securities laws
by issuing materially false and misleading statements contained in press
releases and filings with the Securities and Exchange Commission during the
Class Period concerning the Company’s financial results and operations.
Specifically, the Complaint charges that defendants grossly inflated the
Company’s projections for the fiscal years 2004 and 2005, thereby causing
UTStarcom’s shares to trade at artificially inflated levels. However,
defendants concealed from the investing public that UTStarcom had massive
supply chain constraints delaying legitimate revenue recognition, its prime
margins were eroding in China, and its Japanese-related revenue projections
were overstated by $290 million. Defendants also concealed that the Company
lacked internal control over its ability to analyze revenue recognizing
criteria and was in violation of Nasdaq rules requiring that the Board of
Directors have a majority which is independent.
On September 16, 2004, UTStarcom stated in a SEC filing that a Company-
initiated review of a deal with Japan Telecom “led management to conclude that
certain significant control deficiencies exist related to the review and
evaluation of criteria related to revenue recognition, including process
deficiencies with respect to obtaining evidence of delivery” and that “certain
inventory transactions recorded in the quarter ended June 30, 2004 were in
error.” News of significant problems with the Company’s internal controls
caused UTStarcom shares to drop 5.86% the next day, September 17, 2004. On
September 20, 2004, UTStarcom announced that it was revising its financial
guidance downward for third-quarter and full-year 2004. News that the entire
$290 million in revenue from the Japan Telecom deal was not eligible for
recognition in 2004 caused UTStarcom shares to drop $1.50, or 9.86%, in one
day on very heavy volume, to close at $13.70 on September 20, 2004.
If you purchased UTStarcom securities during the Class Period, you may, no
later than January 14, 2005, move to be appointed as a Lead Plaintiff in this
class action. A Lead Plaintiff is a representative, chosen by the Court, that
acts on behalf of other class members in directing the litigation. The Private
Securities Litigation Reform Act of 1995 directs Courts to assume that the
class member(s) with the “largest financial interest” in the outcome of the
case will best serve the class in this capacity. Courts have discretion in
determining which class member(s) have the “largest financial interest,” and
have appointed Lead Plaintiffs with substantial losses in both absolute terms
and as a percentage of their net worth.
If you have sustained substantial losses in UTStarcom securities during
the Class Period, please contact Spector, Roseman & Kodroff, P.C. at
classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff
selection process. If you have relatively small losses, your ability to
participate in any recovery will be protected by the Lead Plaintiff(s), and
you need take no affirmative steps at this time.
If you wish to join this action, please visit
http://www.srk-law.com/dbjoinaclassaction.asp. If you wish to discuss this
action or have any questions concerning this notice or your rights or
interests, please contact plaintiff’s counsel Robert M. Roseman toll-free at
888-844-5862 or via e-mail at classaction@srk-law.com. For more detailed
information about the firm please visit its website at http://www.srk-law.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania,
concentrates its practice in complex litigation including actions dealing with
securities laws, antitrust, contract and commercial claims. The firm is
active in major litigation pending in federal and state courts throughout the
United States. The firm’s reputation for excellence has been recognized on
repeated occasions by courts which have appointed the firm as lead counsel in
numerous major class actions involving violations of the federal securities
laws and the federal antitrust laws, and consumer fraud. As a result of the
efforts of the firm, and its members, hundreds of millions of dollars have
been recovered through judgments and settlements on behalf of thousands of
defrauded shareholders and companies.
Web Site: http://www.srk-law.com/dbjoinaclassaction.asp
