ATLANTA, July 3, 2003 (PRIMEZONE) -- Chitwood & Harley announces that it has filed a class action lawsuit in the United States District Court for the Middle District of North Carolina, on behalf of all purchasers of securities of Cree, Inc., ("Cree" or the "Company"), (Nasdaq:CREE), between July 24, 2001, and June 13, 2003, inclusive (the "Class Period"). The suit is brought against Cree, Inc., Charles Swoboda, Cynthia Merrell, and F. Neal Hunter. The civil action number is 1:2003cv00645. If you have questions concerning this matter or your rights, please click on Cree on our website, www.classlaw.com where a complaint is available, or email or call Jennifer Morris at jlm@classlaw.com or 1-888-873-3999 ext 6883.
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 July 24, 2001 and June 13, 2003. The complaint alleges that Cree issued materially false and misleading press releases and SEC reports, thereby inflating its results and stock price. According to the complaint, during the Class Period, Cree issued press releases announcing its results for its fiscal fourth quarter 2001, year 2002, and the first three fiscal quarters of 2003, and filed financial reports covering such quarters with the SEC. Cree's earnings releases and SEC filings were materially false and misleading when made because they failed to disclose that: (1) a material portion of the Company's revenues were generated from non "arms length" sales to related entities that did not reflect the true demand for the Company's products; (2) the Company failed to implement and maintain an adequate internal accounting control system; (3) since 2002, Eric Hunter, Cree's former President, CEO and Chairman had alleged, to the Company's board of directors, that the Company was improperly accounting for transactions with related entities and was issuing and filing materially false and misleading press releases and financial reports; and (4) that a material portion of Cree's reported Class Period sales were improperly recognized and reported in the Company's financial statements in violation of Generally Accepted Accounting Principles.
The market first learned of Cree's improper revenue recognition practices on June 13, 2003. On that date, Cree announced that its former CEO, President and Chairman has filed a private action accusing the Company and current Chairman F. Neal Hunter of misleading investors and the SEC by issuing false press releases and filing false financial statements. The market reacted swiftly to this news, and the price of Cree common stock fell from $22.21 per share on June 12, 2003 to $18.10 per share on June 13, 2003, a drop of over 18%, on extremely heavy trading volume.
The deadline to file lead plaintiff papers, for those class members wishing to serve in this capacity, is August 18, 2003. There are certain legal requirements to serve as lead plaintiff, which we would be happy to discuss with you. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have any questions concerning this notice or your rights with respect to this matter, you may contact Lauren Antonino or Jennifer Morris at 1-888-873-3999 (toll-free) or by e-mail at jlm@classlaw.com. You may also contact us through our website, www.classlaw.com, by clicking on Cree, Inc.
Chitwood & Harley LLP is a class action firm that concentrates its practice in representing victims of securities fraud and corporate mismanagement, as well as other complex litigation. Chitwood & Harley has been appointed lead counsel in major actions throughout the United States and has been instrumental in recovering billions of dollars on behalf of its clients. Clients and courts alike have praised the results achieved by Chitwood & Harley. Recently, the federal judge in In re BankAmerica Securities Litigation, which resulted in the highest recovery last year in a securities class action, commented favorably on counsel's performance stating: "Class members were well served by experienced attorneys who, through considerable time and effort, obtained a significant recovery for their clients," and, "(a)s the Court has remarked throughout this litigation, class counsel ... have performed at exceptionally high levels, and all parties have been exceedingly well represented."
For more information about Chitwood & Harley, please visit our website at www.classlaw.com or contact Jennifer Morris at 1-888-873-3999 (toll-free), by e-mail at jlm@classlaw.com or at 1230 Peachtree Street, Suite 2300, Atlanta, Georgia 30309.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca