BALA CYNWYD, Pa., Aug. 30, 2002 (PRIMEZONE) -- A shareholder sued Riverstone Networks, Inc. ("Riverstone") (Nasdaq:RSTN) claiming that the company misled investors about its business and financial condition, as alleged in a complaint filed by the law firm of Schiffrin & Barroway, LLP.
The complaint was filed in the U.S. District Court for the Northern District of California and seeks damages for violations of federal securities laws on behalf of all investors who bought Riverstone Networks, Inc. securities between August 10, 2001 and June 5, 2002 (the "Class Period").
Schiffrin & Barroway, LLP has prosecuted shareholder class actions for over fourteen years and has recovered more than $1 billion for investors. If you are a shareholder of Riverstone Networks, Inc. and want to learn more about this lawsuit and about becoming a lead plaintiff, you may visit our website at http://www.sbclasslaw.com/cgi/signup.cgi.
The complaint alleges that the California-based Riverstone Networks, Inc., during the Class Period, desperately sought to create the impression that Riverstone had the ability to directly enter these markets with a captive client base. Thus, Riverstone, through, among other things, its relationship with Hutchison Global Crossing, could compete head-to-head with the dominant companies in the industry. Prior to its relationship with Hutchison, Riverstone was having difficulty gaining operational momentum within these potentially lucrative Asian markets.
The complaint alleges that each defendant was aware that Riverstone would be unable to meet its projected Q2 02 to Q1 03 revenue and earnings per share ("EPS") targets unless they manipulated the Company's revenue, earnings and receivables. However, because the "appearance" of growth was so critical to defendants' plan to inflate the price of Riverstone shares and sell their own shares and raise monies via its $150 million debt offer, defendants continued to maintain throughout the Class Period that Riverstone would meet revenue projections and EPS when, in reality, defendants knew that Riverstone could not achieve their projections without attempting to fraudulently record revenue by inducing clients who defendants knew did not have the ability to pay to agree to take delivery of goods and that Riverstone was, in fact, suffering from greater losses. Defendants knew that if Riverstone's inability to generate legitimate sales growth from customers who could actually pay was revealed, together with the fact that Riverstone's projected growth was contingent upon sales to clients which defendants knew would be unable to pay pursuant to the Company's internal policy, if ever, due to their own financial deterioration, defendants would not reap the financial rewards of selling their own shares at artificially inflated prices which totaled $7.1 and the $150 million debt offering would be just a pipe dream.
If you purchased Riverstone Networks, Inc. securities between August 10, 2001 and June 5, 2002, you may be a member of the class and have until September 24, 2002 to move the court to become a lead plaintiff. To learn more about your rights and interests in this case and your ability to potentially recoup your losses, please contact Schiffrin & Barroway directly at 888-299-7706 (toll free) or 610-822-2221, fax number 610-822-0002, e-mail at info@sbclasslaw.com or visit our website at www.sbclasslaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.