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Not all investors have been negatively affected by the backdated
options scandal. Thankfully, many of the stocks have recovered
because of the many investors who purchased after the bad news
came out.
However certain investors were very negatively affected – they
purchased their shares just before or several months before the
backdated options scandal was revealed. They paid too much for
their shares because, in many cases, the stocks dropped significantly
after situations involving improper backdating of options were
reported. In particular, you want may want to consider your options
if you are an affected investor in the following companies.
Affiliated Computer Services Inc. (ACS)
On May 10, 2006, the Dallas technology outsourcer acknowledged,
after a preliminary internal probe, that it had issued executive stock
options that carried "effective dates" preceding the written approval
of the grants. ACS said it plans a charge of as much as $32 million
to rectify its accounting related to the grants. It is being examined
by the Securities and Exchange Commission.
Altera Corporation (ALTR)
On June 21, Altera said its special committee has reached a
preliminary conclusion that the actual measurement dates for certain
option grants issued between 1996 and 2000 differed from the
recorded grant dates, and that it expects to restate its financial
statements for the fiscal years ended 1996 through 2005.
Sycamore Networks, Inc. (SCMR)
On May 23, 2006, the Company disclosed that it was informed that
the SEC has started a formal investigation related to certain stock
options granted by the company during calendar years 1999 through
2001 that were erroneously accounted for under GAAP. The Company
said it had previously instituted and completed an independent
investigation into this matter and subsequently restated financial
results for fiscal years 2000 through 2004 and for the first two
quarters of fiscal 2005.
McAfee, Inc. (MFE)
On May 30, 2006, McAfee ended the employment of General Counsel
Kent Roberts after an internal review of the company's employee
stock options revealed an improper grant involving Roberts in 2000.
On June 9, McAfee disclosed it received a document subpoena pursuant
to a formal SEC investigation. On July 27, McAfee said findings from
a review of its practices and accounting for stock-option grants will
force it to restate prior results for at least one, and possibly several,
past periods.
Power Integrations (POWI)
The Company recently announced that it will not make its deadline for
filing its delayed quarterly and annual reports and, as a result,
will likely be delisted.
Monster Worldwide (MNST)
The Company recently indicated that it recognized $339.6 million
in charges after an internal investigation uncovered improper
stock-option awards to employees between 1997 and 2003. The
Company’s CEO quit his job in early October and, in November,
the Company’s General Counsel was fired.
IPO Inaccuracies Lead to Litigation
AtriCure (NASDAQ: ATRC), a medical device company, allegedly may
not have been totally forthcoming in SEC documents associated with
its IPO. Specifically, the Company neglected to mention that the
Cleveland Clinic, where a significant portion of procedures that used
the Company's products were being performed, was an investor in
the Company. Nor did the Company mention that some doctors at
the Cleveland Clinic had been paid consultants.
On February 16, 2006, AtriCure disclosed that the Company was
experiencing a "negative impact" on its business due to the
revelations concerning the Cleveland Clinic. Not surprisingly, the
stock plummeted and it is understandable that investors who
purchased AtriCure before that date were upset
Investors who purchased AtriCure between August 4, 2005 and
February 16, 2006, are affected.
Loan Create Difficulties for Technical Olympic, Inc. (NYSE: TOA)
Investors… Does it make a difference if a company represents that
a loan is non-recourse and, later, the market discovers that company
is liable for repayment of the loan? Absolutely. Just ask the investors
in Technical Olympic USA, Inc. (NYSE: TOA), a Florida-based builder
of single-family residences, town homes, and condominiums.
It is alleged that Technical Olympic represented that it had completed
the acquisition of the homebuilding assets and operations of Transeastern
Properties, Inc. and the joint venture was funded with non-recourse debt.
However, on November 6, 2006, the Company disclosed in a SEC filing
that the Company faced exposure for the full repayment of the loans of
the Transeastern Joint Venture in the event the Joint Venture voluntarily
filed for bankruptcy protection. More bad news would follow. On
November 7, 2006, the Company disclosed that one of the lenders to
the joint venture had made a demand on the Company in connection
with the debt of the joint venture. Not surprisingly, Technical Olympic
stock dropped both days as the true facts about the Company was
revealed.
It appears that investors who purchased between August 1, 2005 and
November 6, 2006, are affected.
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 www.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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