Scientific-Atlanta, Inc. Securities Litigation
United States District Court for the Northern District of Georgia
Case No. 1:01-cv-01950-RWS
Keller Rohrback L.L.P. is co-lead counsel in this securities fraud action filed on behalf of purchasers of the securities of Scientific-Atlanta, Inc. (“Scientific-Atlanta” or the “Company”) (NYSE:SFA) between January 18, 2001 and August 16, 2001, inclusive (the “Class Period”). Shareholders allege that Scientific-Atlanta and certain of its officers and directors violated federal securities laws by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Scientific-Atlanta securities. In addition, during the Class Period, defendants Wallace G. Haislip and James F. McDonald took advantage of their inside status to sell hundreds of thousands of their own shares of Scientific-Atlanta at artificially high prices for proceeds of over $46 million.
Specifically, plaintiffs allege that during the Class Period, defendants engaged in a fraudulent scheme to falsely portray Scientific-Atlanta’s financial performance and the demand for its products, so that Scientific-Atlanta could continue to report consecutive quarters of growth and sequential “records” in key measurements such as sales, net earnings, bookings, backlog and number of set-tops shipped. Defendants’ fraudulent scheme included “channel stuffing,” allowing the Company to report market share gains and distinguish itself at a time when Scientific-Atlanta’s competitors suffered from an industry-wide decline in demand and sales.
On July 19, 2001, at the close of trading, Scientific-Atlanta was forced to admit that the demand for its products was not accelerating as defendants had continually stated throughout the Class Period. Then, on August 16, 2001, defendants withdrew their previous guidance for the first quarter and fiscal year 2002, citing, in part, the reduced deployment rates reported by cable operators, reflecting reduced demand. As a result of these announcements, the Company’s stock price plummeted on unusually heavy trading volumes.
Related cases have been consolidated in the United States District Court for the Northern District of Georgia, Atlanta Division. On November 29, 2001, the honorable Richard W. Story appointed Hugh Petersen and four others as lead plaintiffs and approved the law firms of Keller Rohrback L.L.P. and Chitwood & Harley as co-lead counsel. A consolidated class action complaint was filed on January 31, 2002. On December 23, 2002, the Court denied defendants’ motion to dismiss. Defendants filed an appeal, and on June 22, 2004, the 11th Circuit Court of Appeals published an opinion affirming the district court’s decision. The parties are presently engaged in discovery.
On September 7, 2007, the honorable Richard W. Story granted Plaintiff’s Motion for Class Certification.
On August 30, 2009, the honorable Richard W. Story authorized the issuance of the Notice to Class of Pendency of Class Action. The Court authorized this Notice to inform Class Members of the lawsuit as well as their options in preserving their legal rights.
All persons who purchased or otherwise acquired the securities of Scientific-Atlanta, Inc. (“SA”) between January 18, 2001, and August 16, 2001, inclusive and retained said securities on or after July 19, 2001, or who sold put options of SA between January 18, 2001, and August 16, 2001, inclusive, which options were exercised on or after July 19, 2001 (the “Class”). Notwithstanding the foregoing, the following persons and entities are excluded from the Class: (i) the Defendants to this action; (ii) the officers and directors of SA; (iii) any entity in which any Defendant or officer or director of SA has or had a controlling interest; and (iv) the legal affiliates, representatives, heirs, controlling persons, successors and predecessors in interest or assigns of any of the persons or entities identified in (i), (ii) or (iii) above.
Notice of Pendency — 01/20/12
Summary Notice of Pendency — 01/20/12