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A critical element assuring the integrity of U.S. securities markets
is the accuracy of Registration Statements and Prospectuses in
connection with public offerings. This is true not only for Initial
Public Offerings (IPOs), but also for subsequent Secondary Offerings.
If these documents contain untrue statements of material facts,
then investors have a cause of action under U.S. securities laws.
A current example of a company that allegedly prepared improper
and misleading documents is Ikanos Communications
(NASDAQ: IKAN). Ikanos engages in the development and
provision of programmable semiconductors that enable fiber-fast
broadband services over telephone companies existing copper
lines. The Company offers very-high-bit-rate digital subscriber
lines that are designed to address different segments of the
broadband semiconductor market for carrier networks and
subscriber premises equipment.
It has been alleged in actions brought on behalf of Ikanos
shareholders that the Company’s Registration Statement and
Prospectus for both its IPO on September 22, 2005 and its
secondary offering on March 8, 2006 contained untrue statements
of material facts and omitted facts necessary to make the other
statements not misleading.
Specifically, it is alleged that the documents represented that
the Company’s business had grown due to successful deployments
in Japan. In truth, however, it is alleged that the deployments in
Japan had grown because the Company had shipped excessive
product to Japanese customers in excess of those customers’
needs. This practice is sometimes referred to as “channel stuffing.”
As is typical in channel stuffing situations when the true facts are
revealed, the stock collapses. In this case, the stock plummeted
well under $8 per share after the true condition of the Company
was revealed. Specifically, on October 4, 2006, Ikanos announced
that its revenue expectation were $4 to 6 million lower than
expected and its fourth quarter revenue results would be adversely
affected due to, among other things, “carriers in Japan currently
working through their existing equipment levels.” This last phrase
is interpreted by most analysts to mean that the Company reported
high sales previously because they had stuffed the channel.
Investors who purchased Ikanos common stock pursuant to and/or
traceable to its September 22, 2005 IPO or its March 8, 2006
secondary public offering are affected.
If you’re an affected investor in Ikanos or the companies listed
below, you may wish to contact us at www.securitiessleuth.com
or 877-511-4717 to discuss your options.
Other cases under investigation:
Apollo Group, Inc. (NASDAQ: APOL)
Aspen Technology Inc. (AZPN)
BP Prudhoe Bay Royalty Trust (BPT)
CNET Networks (CNET)
McAfee Inc. (MFE)
Meade Instruments Corp. (NASDAQ: MEAD)
Quest Software (NASDAQ: QSFT)
Presstek, Inc. (NASDAQ: PRST)
Warner Chilcott Limited (NASDAQ:WCRX)
Now with respect to securities cases that have recently settled. If
you are an affected investor – you purchased any of these stocks
during the relevant class period, you may wish to contact the claims
administrator to obtain additional information. Remember, if you
don’t submit your claim form, you won’t receive your share of
any settlement.
Ask Jeeves (ASKJ)
Class Period: November 18, 1999 to May 16, 2000
Claims Deadline: February 5, 2007
Claims Administrator: Rust Consulting
Broadwing, Inc. (BRW)
Class Period: January 17, 2001 to May 21, 2002
Claims Deadline: November 30, 2006
Claims Administrator: Garden City
Information regarding other recent settled cases, including the
cases listed below can be found at securitiessleuth.com.
Advanced Marketing Services
King Pharmaceuticals, Inc.
MasTec, Inc.
McLeodUSA, Inc.
Again you should contact the claims administrator (rather than us).
However, if you are an affected investor in any of the companies
under investigation, you many wish to contact us so that you can
consider your options.
Likewise, if you happen to be aware of corporate restatements or
other financial fraud -- especially if you're a victim -- you're
encouraged to contribute to the Sleuth by giving your own tip-offs
at www.securitiessleuth.com or by e-mailing info@securitiessleuth.com.
You can also call Mark McNair at 877-511-4717. If you have a friend
or colleague you think would benefit from The Sleuth, please pass
along this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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