NEW YORK, June 16, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit in the United States District Court for Northern District of California on behalf of shareholders who purchased or otherwise acquired the securities of Magma Design Automation, Inc. ("Magma" or the "Company") (Nasdaq:LAVA) between October 23, 2002 through April 12, 2005, inclusive (the "Class Period").
Magma Design Automation, Inc. provides electronic design automation software products and related services. The complaint alleges that throughout the Class Period defendants failed to disclose that Magma faced the serious risk of infringing on intellectual property rights of competitor Synopsys, Inc. because inventions that were critical to Magma's business, and which were patented by Magma, were designed by Magma's Chief Scientist, Lukas van Ginneken, while he was employed by Synopsys. This fact, and the significant risk it posed, was known to defendants or recklessly disregarded by them, but was concealed from Magma investors. Instead of admitting to the degree of seriousness of the Synopsis infringement action at the time it was filed, defendants adamantly denounced the allegations, characterizing them as completely baseless. While Magma's stock price was artificially inflated, Magma insiders, including each of the individual defendants, sold 4,436,163 shares of Magma common stock at artificially inflated prices, reaping gross proceeds of $82,385,174.
The truth was disclosed on April 13, 2005 when the market learned that Magma's Chief Scientist admitted, in a sworn declaration filed in the Synopsys infringement action, that inventions covered by two of Magma's patents were conceived by him while he was employed by Synopsys and that his supervisor at Magma, and likely others, knew that the inventions covered by the patents were conceived by him at Synopsis and were encompassed by an agreement with Synopsis that established that it owned the rights to those inventions.
This news caused Magma's stock to plummet by 40.7% in one day, from $9.42 per share on April 12, 2005 to $5.58 per share on April 13, 2005, on unusually high trading volume exceeding 14.4 million shares.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired Magma securities on any world exchange between October 23, 2002 through April 12, 2005, and sustained damages, you may, no later than August 15, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Christopher Hinton of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.