BENSALEM, Pa., Sept. 19, 2008 (GLOBE NEWSWIRE) -- Law Offices of Howard G. Smith, representing investors of Novatel Wireless, Inc., has filed a securities class action lawsuit on behalf 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"). The class action lawsuit was filed in the United States District Court for the Southern District of California.
The Complaint alleges that the defendants violated federal securities laws by issuing material misrepresentations to the market concerning Novatel's financial performance and prospects, thereby artificially inflating the price of Novatel securities. 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.
On May 20, 2008, 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 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.
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased or otherwise acquired Novatel securities between February 5, 2007 and August 19, 2008, you have certain rights, and have until November 17, 2008, to move for Lead Plaintiff status. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. 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 Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by telephone at (215)638-4847, Toll-Free at (888)638-4847, by email to howardsmith@howardsmithlaw.com or visit our website at www.howardsmithlaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.globenewswire.com/ca.