BALA CYNWYD, Pa., June 17, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Middle District of North Carolina on behalf of all purchasers of the common stock of Cree, Inc. ("Cree" or the "Company") (Nasdaq:CREE) from August 19, 1998 through June 13, 2003, inclusive (the "Class Period").
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 Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The Complaint alleges 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 material misrepresentations to the market between August 19, 1998 and June 13, 2003, thereby artificially inflating the price of Cree securities.
During the Class Period, the Company issued statements that failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company had materially overstated its net income and earnings per share; (2) that the defendants artificially boosted Cree's operating income through an undisclosed agreement with defendant Neal Hunter's brother, Jeff Hunter, the then chairman of C3, that required C3 to accept shipments of silicon carbide ("SiC") crystals for the manufacture of moissanite gemstones far in excess of market demand; (3) that the defendants failed to properly disclose how officers and director's compensation was determined; (4) that the defendants failed to disclose in its registration statements and its prospectuses the proper use of the proceeds from those offerings.
For example, in its January 14, 2000 prospectus, Cree failed to disclose that it would invest $5 million of the offering proceeds in World Theatre, Inc.; (5) that the defendants were actively concealing these facts in order to manipulate the Company's earnings outlooks in order to maintain its favorable stock prices; (6) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (7) that the Company's earnings projections were lacking in any reasonable basis when made.
On June 13, 2003, Eric Hunter, the former chief executive of Cree filed a $3 billion lawsuit against Cree and defendant Neal Hunter, his brother. Among the allegations contained in the lawsuit, Eric Hunter alleged that since as early as August 1995 and continuing until at least May 2003, Cree and the Individual Defendants engaged in a series of undisclosed corporate activities, which included, among other things, the filing of false and misleading statements to the public and the SEC with respect to the Company's secondary stock offerings, anticipated earnings and revenue, reported income and operating income.
Market reaction to the news was swift. Shares of Cree fell 18.5% or $4.11 per share to close at $18.10 per share on heavy trading volume on June 13, 2003.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/currentcases.cfm.
If you are a member of the class described above, you may, not later than August 18, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com