Alleges that as a result of a misleading press release the company's stock price was artificially escalated

March 23, 2001

2 Min Read

NEW YORK -- Wolf Haldenstein Adler Freeman & Herz LLP commenced a class action lawsuit in the United States District Court for the Northern District of California on behalf of purchasers of New Focus, Inc. (``New Focus'' or the ``Company'') (NASDAQ: NUFO - news) securities during the period between January 31, 2001 and March 5, 2001 (the ``Class Period''), against New Focus. Also named as defendants are Milton M. Chang (Chairman of the Board), Kenneth R. Westrick (President, Chief Executive Officer, and Director), Nicola Pignati (Chief Operating Officer), John A. Dexheimer (Director), R. Clark Harris (Director), Timothy Day (Vice President of Engineering Telecom and Chief Technology Officer), Robert A. Marsland (Vice President of Focused Research), George Yule (Vice President of World Wide Materials), and Bao Tong Ma (Vice President and General Manager).

The complaint alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, promulgated thereunder. According to the complaint, New Focus purports to be a supplier of fiber optic products for next-generation optical networks, being sold under the Smart Optics for Networks brand. Specifically, the complaint alleges that on January 30, 2001, New Focus issued a press release which was materially false and misleading in increasing the Company's revenue guidance for the fiscal year 2001 from $150 million to $240 million. As a result of this press release, the Company's stock price was artificially escalated. During the five business days subsequent to the press release, defendants sold in excess of $35 million of their own stock based on defendants' knowledge that the Company had a problem with inventory build-up, as well as delayed and canceled orders from customers. Approximately five weeks later, defendants disclosed the Company's problems and lowered the guidance for the fiscal year 2001 to $170-190 million. As a result of defendants' dissemination of false and misleading information, the value of New Focus stock plummeted and plaintiff and other members of the Class suffered substantial losses. The complaint alleges that New Focus disseminated false and misleading statements designed to conceal the Company's deteriorating financial condition and declining demand for its products long enough to allow several officers and directors, named as defendants herein, to sell or arrange to sell over $61 million of their privately held New Focus common stock.

If you would like to view a copy of the complaint filed in this action, please visit the Wolf Haldenstein web site located at

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