PHILADELPHIA, March 23, 2001 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit has been commenced in the United States District Court for the District of New Jersey against defendant Nortel Networks Corporation ("Nortel Networks" or the "Company") on behalf of purchasers of the stock who purchased Nortel Networks Corporation (NYSE:NT) securities during the period from November 1, 2000 through February 15, 2001 (the "Class Period").
The Complaint alleges that the defendants, who issued materially false and misleading information that misrepresented the Company's financial condition and prospects, violated the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
On January 18, 2001, Nortel issued a press release announcing outstanding fourth quarter and fiscal year 2000 results. The press release projected strong market demand in Nortel's target industry segments and stated that Nortel would achieve 30% growth in revenues and EPS in 2001, despite economic uncertainty.
The complaint alleges that defendants' guidance as to revenues and earnings for the first quarter of 2001 and full year 2001 as set forth in the Company's January 18, 2001 press release was materially false and misleading because at the time they made these statements, defendants were aware that Nortel's customers, who are largely Internet-related companies and telecommunications companies, were suffering from severe deterioration of their businesses, so that they had and would have to drastically reduce their purchases from Nortel in the first quarter of 2001, leading to weakness in revenue and earnings growth for the remainder of 2001. As a result of the foregoing, misrepresentations, the price of Nortel securities to be artificially inflated throughout the Class Period. Additionally, certain Company insiders took advantage of the artificially inflated prices to dump thousands of their own shares on unsuspecting investors, reaping proceeds of over $7 million.
On February 15, 2001, after the close of trading, the Company stunned investors when it issued a press release detailing new earnings and revenue guidance. Nortel slashed its projected growth rate for 2001 revenues and EPS to 15% and 10%, respectively, from the previously announced growth rate of 30%. These disclosures caused Nortel's stock price to plummet from its February 15, 2001 closing price of $29.75 to as low as $19.50 on February 16, 2001, wiping out more than $33 billion in market capitalization. The lawsuit seeks to recover losses suffered by individual and institutional investors who purchased the Company's securities during the Class Period at artificially inflated prices.
If you purchased Nortel Networks Corporation securities during the Class Period, you may, no later than April 17, 2001, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Nortel Networks Corporation securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@spectorandroseman.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@spectorandroseman.com. For more detailed information about the firm please visit our Website at http://www.spectorandroseman.com
SPECTOR, ROSEMAN & KODROFF, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca