Stratos Socked With Suit

NEW YORK -- Notice is hereby given that a class action lawsuit was filed on August 1, 2001, in the United States District Court for the Southern District of New York, on behalf of purchasers of Stratos Lightwave, Inc. (``Stratos'') (NASDAQ:STLW - news) common stock between June 27, 2000 and July 25, 2001, inclusive (the ``Class Period''). The complaint alleges that defendants violated the federal securities laws by issuing and selling Stratos common stock pursuant to the June 27, 2000 IPO without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors. The complaint alleges that, in exchange for the excessive commissions, members of the underwriting group allocated Stratos shares to customers at the IPO price of $21 per share. To receive the allocations (i.e., the ability to purchase shares) at $21, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices. The requirement that customers make additional purchases at progressively higher prices as the price of Stratos stock rocketed upward (a practice known on Wall Street as ``laddering'') was intended to (and did) drive Stratos' share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the underwriters and their customers to reap enormous profits by buying stock at the $21 IPO price and then selling it later for a profit at inflated aftermarket prices. On June 27, 2000, when the it opened for trading, the price of the stock more than doubled to a high of $56.125, to close that day at $34.125, on heavy volume of 22,458,400 shares. Rather than allowing their customers to keep their profits from the IPO, the complaint alleges, the underwriters required their customers to ``kick back'' some of their profits in the form of secret commissions. These secret commission payments were sometimes calculated after the fact based on how much profit each investor had made from his or her IPO stock allocation. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectus distributed to investors and the Registration Statement filed with the SEC in order to gain regulatory approval for the Stratos offering contained material misstatements regarding the commissions that the underwriters would derive from the IPO transaction and failed to disclose the additional commissions and ``laddering'' scheme discussed above. Plaintiff seeks to recover damages on behalf of class members and is represented by, among others, the law firm of Stull, Stull & Brody. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 25 years and has obtained court approval of substantial settlements on numerous occasions. If you bought the common stock of Stratos between June 27, 2000 and July 25, 2001, you may, no later than September 24, 2001, request the Court appoint you as lead plaintiff. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Tzivia Brody, Esq. at Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by e-mail at [email protected], or by fax at 212/490-2022, or by writing to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017.