Class action lawsuit filed against Tellabs for misleading its shareholders

July 19, 2002

2 Min Read

BALA CYNWYD, Pa. -- A class action lawsuit was filed in the United States District Court for the Northern District of Illinois on behalf of purchasers of the securities of Tellabs, Inc. (NASDAQ:TLAB - News) between December 11, 2000 and June 19, 2001 inclusive ("Class Period'). The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between December 11, 2000 and June 19, 2001. According to the complaint, Tellabs had represented to the public, in press releases issued throughout the Class Period, that its new products were enjoying strong demand, that the seeming slowdown in its business was due to "component-parts shortages which have been corrected" and that Tellabs' business was strong fundamentally and the Company would meet earnings and revenues expectations. The complaint alleges that these, and other, statements were materially false and misleading because, as alleged in the complaint, its new optical networking line of products were inferior to the competition and their products were not well-received or in high demand. The complaint further alleges that, contrary to its statements to the investing public, the Company's highly-touted acquisition of SALIX was a failure as sales of the product line Tellabs gained in the acquisition were falling. On June 19, 2002, Tellabs issued a press release revealing that second quarter of 2001 revenues would be 35% less than guidance reiterated only weeks before, and that the company's earnings would be breakeven instead of the consensus $0.29 per share. In reaction to the announcement, the price of Tellabs' common stock fell by 31%, from $23 per share on June 19 to $15.87 on June 20, representing a 75% decline from the Class Period high. During the Class Period, defendant Birck sold a total of 80,000 shares of Tellabs common stock at prices between $64.25 to $65.38 per share, grossing proceeds of more than $5.18 million. Plaintiff is represented by The Law Offices of Marc S. Henzel. If you bought the securities during the class period, you may, no later than September 2, 2002, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. Tellabs Inc.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like