LOS ANGELES, Sept. 16, 2008 (GLOBE NEWSWIRE) -- Notice is hereby given that Glancy Binkow & Goldberg LLP has filed a Class Action lawsuit in the United States District Court for the Southern District of California on behalf of a class (the "Class") consisting of all persons or entities who purchased or otherwise acquired the securities of Novatel Wireless, Inc. ("Novatel" or the "Company") (Nasdaq:NVTL) between February 5, 2007 and August 19, 2008, inclusive (the "Class Period").
A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at info@glancylaw.com, or visit our website at www.glancylaw.com.
The Complaint charges Novatel and certain of the Company's executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning the Company's financial performance and prospects caused Novatel's stock price to become artificially inflated, inflicting damages on investors. Novatel Wireless, Inc. provides wireless broadband access solutions for the mobile communications market worldwide. The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Novatel's financial performance were materially false and misleading. Specifically, the Complaint alleges that defendants' public statements failed to disclose or indicate the following: (1) that the Company improperly recognized revenue in violation of its own revenue cut-off procedures; (2) that, as a result of this improper revenue recognition, the Company misstated its financial results during the Class Period; (3) that the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles (GAAP); (4) that the Company lacked adequate internal and financial controls; and (5), as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times.
Throughout most of the Class Period, defendants issued favorable revenue guidance and touted the Company's financial performance and prospects. For example, on February 20, 2008, Novatel provided revenue guidance of approximately $110 million for first quarter 2008, based in part on "expectations of strong demand for the Company's products, particularly its USB products, as well as assumptions about industry wide supply constraints on certain components."
On May 20, 2008, however, Novatel filed a Form 8-K with the SEC stating that the Company "will notify the Nasdaq Stock Market that it did not timely file its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2008," and that "the Company and its Audit Committee have undertaken an expanded enhanced review of the Company's revenue cut off procedures and internal controls related to certain customer contracts, which review is ongoing."
Then, on August 19, 2008, following the close of trading Novatel shocked investors when it issued a press release which revealed that the Audit Committee of the Company's board of directors had reviewed the accounting for six transactions and made a preliminary determination to move approximately $3.4 million of revenues from the first quarter of 2008 to the second quarter of 2008. Moreover, Novatel disclosed for the first time that this was not a minor accounting issue and that there was a possibility that the Company may have to restate its audited financial statements for the 2007 fiscal year. As a result of this news, shares of Novatel declined $2.11 per share, more than 25%, to close on August 20, 2008 at $6.29 per share, on unusually heavy volume.
Plaintiff seeks to recover damages on behalf of Class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the Court, not later than November 17, 2008, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com.
More information on this and other class actions can be found on the Class Action Newsline at http://www.globenewswire.com/ca/