Two Law Firms Commence Class Actions Against Apple
Two Law Firms Commence Class Actions Against Apple
by , 5:10 PM EDT, October 16th, 2001
Two law firms have both announced class actions against Apple today. The first comes from Milberg Weiss, a 170-lawyer firm with offices across the US. That firm is suggesting that Apple deliberately ran up its stock price starting with the announcement at MACWORLD New York 2000 of the PowerMac G4 dual-processor machines, the Cube, and new iMacs in advance of four Apple executives selling some 370,000 shares of their own Apple stock one month before the company announced a major earnings warning. Though an institutional investor launched the suit, the law firm is still looking for a lead plaintiff to head the class action. That firm's press release in full:
Milberg Weiss today announced that a class action has been commenced by an institutional investor in the United States District Court for the Northern District of California on behalf of purchasers of Apple Computer Inc. ("Apple") common stock during the period between July 19, 2000 and Sept. 28, 2000 (the "Class Period").
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss at 800/449-4900 or via e-mail at email@example.com. If you are a member of this class, you can join this class action online at http://www.milberg.com/apple/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Apple and its CEO with violations of the Securities Exchange Act of 1934. The complaint alleges that on 7/18-19/00, Apple introduced its new Power Mac G4 Dual Processor, G4 Cube and iMac personal computers, representing that they were exceptionally powerful, fast and attractive, coming with exceptionally attractive designs and containing new and revolutionary features. At this time, Apple represented that the development of these new products was completed, they were ready for mass production and would be available in quantity very shortly. Apple claimed this would result in Apple achieving strong revenue and earnings per share ("EPS") growth in its 4thQ F00 (to end 9/30/00) and F01. As a result, Apple's stock climbed to a Class Period high of $64-1/8 in early 9/00, when four top Apple officers sold 370,000 shares of their Apple stock for $22 million. Suddenly, just 20-25 trading days later, on 9/28/00, Apple shocked investors by revealing a huge 4thQ F00 revenue and EPS shortfall due to very poor sales to its education (K-12) market and poor consumer acceptance of its new personal computer products (some of which had been late to market, had defects and lacked features which were essential for market success), resulting in the accumulation of excessive inventories of finished goods in Apple's distribution channel and Apple having to cancel component part orders and, thereby, incur financial penalties. As rumors of Apple's troubles circulated prior to and then following Apple's shocking disclosure, Apple's stock collapsed from $61-3/64 on 9/20/00 to $25-3/8 on 9/29/00, continuing to fall to as low as $17 and then to $13-5/8, as investors absorbed the full impact of these shocking revelations, a stock decline that wiped out over $10 billion of Apple's market capitalization in just a few days.
Plaintiff seeks to recover damages on behalf of all purchasers of Apple common stock during the Class Period (the "Class"). The plaintiff is represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Milberg Weiss Bershad Hynes & Lerach LLP, a 170-lawyer firm with offices in New York, San Diego, San Francisco, Los Angeles, Boca Raton, Seattle and Philadelphia, 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 companies, as well as victims of World War II and other human rights violations, and has been responsible for more than $30 billion in aggregate recoveries. The Milberg Weiss Web site has more information about the firm.
The law firm has a special Web page set up for the suit's announcement.
Our second class action suit has less information, but is being initiated by the law offices of Charles J. Pivens, P.A. According to the firm's press release, class status has not been granted to its efforts against Apple. It is not yet clear what the suit will be in regards to, but the dates are the same as the suit from the Milberg Weiss class action mentioned above. That firm's press release in full (including information on three other companies that are being "investigated":
Law Offices Of Charles J. Piven, P.A. today announced that securities actions requesting class action certification have been initiated in various courts alleging violations of federal securities laws on behalf of purchasers of the following securities for the following class periods and/or that Law Offices Of Charles J. Piven, P.A., is conducting an investigation of the following corporations:
Class Period SHOPKO STORES, INC.
SYMYX TECHNOLOGIES, INC.
Initial Public Offering
through December 6, 2000
APPLE COMPUTER, INC.
07/19/00-09/28/00 FARGO ELECTRONICS, INC.
No class has yet been certified in the above actions or no cases have yet been initiated. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased any stock listed above during the class period, you have certain rights. To be a member of the class you need not take any action at this time. You also have the right to retain counsel of your choice.
If you were a purchaser of a stock listed above during the period indicated and want to discuss your legal rights, or if you have information that you believe would assist an investigation into whether any of the above companies have failed to disclose material information, you may e-mail or call Law Offices Of Charles J. Piven, P.A. who will, without obligation or cost to you, attempt to answer your questions. Law Offices Of Charles J. Piven has been involved in securities litigation for over ten years. You may contact Law Offices Of Charles J. Piven, P.A. at The World Trade Center-Baltimore, 401 East Pratt Street, Suite 2525, Baltimore, Maryland 21202, by email at firstname.lastname@example.org or by calling 410/986-0036.
The Mac Observer is in the process of gathering more information on these suits.
The Mac Observer Spin:There's nothing better than a trial-attorney in search of a victim to represent. The Milberg Weiss class action press release leaves out a lot of information, and makes some comments that one might call a "stretch" if one were being polite. Unfortunately, in a litigious society forever in search of a scapegoat, this is the way the game is played. From the facts they mention, there is certainly enough to make a case, and indeed the firm has already earned class status for the suit.
The biggest thing that stands out is that Milberg Weiss says four Apple execs sold stock in advance of issuing an earnings warning. The entire industry took a dive starting when Apple warned, but it's insider selling that could cause Apple some difficulty. Then again, those executives would have had to register to sell those stocks in advance of actually selling them.
Lastly, we'll point out that the bulk of Apple's warning centered around its botched education restructuring, and not from poor sales of the PowerMac G4, the Cube, and the iMac.
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