NEW YORK, May 5, 2005 (PRIMEZONE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) has been appointed Lead Counsel in the federal class action lawsuit against Silicon Storage Technology, Inc. ("Silicon Storage" or the "Company") (Nasdaq:SSTI) and three of the company's officers in United States District Court, Northern District of California. The Louisiana State Employees' Retirement System and the State of Louisiana District Attorney's Retirement System are Lead Plaintiffs. The case has been brought under the Securities Exchange Act of 1934 on behalf of purchasers of Silicon Storage securities between March 22, 2004 and December 20, 2004, inclusive (the "Class Period").
Silicon Storage produces flash memory semiconductor devices, including so-called Nor flash memory devices, used in personal computers, digital cameras and other consumer products. Revenue from sales of such devices has contributed about 50% of the Company's reported revenue.
In late 2003, defendants proclaimed the end of the downturn in the semiconductor market and predicted increasing demand. During the Class Period, defendants stated that Silicon Storage was "the leader in low-density Nor Flash" and that Intel Corp. ("Intel"), Advanced Micro Devices, Inc. ("AMD") and other large suppliers were "retreating" from the low-density flash storage market. The Company predicted that the growing sales of its low density memory devices would fuel increasing revenues and earnings. Defendants also stated that the Company's profit margins were increasing.
The true facts, which were known to the defendants, but allegedly concealed from the investing public, were that the Company was facing intense competition from Intel, AMD and other suppliers, and that this competition was reducing earnings and Silicon Storage's profit margin. As a consequence, the Company accumulated excess inventory that it did not write down as required by GAAP and this failure to write down contributed to the artificial inflation of the Company's reported earnings. During the Class Period, when the Company's shares were trading at artificially inflated prices, individual defendants exploited their corporate positions by selling their personally held shares in Silicon Storage for over $2.9 million. On January 18, 2005, the Company disclosed that the SEC was investigating trading in Silicon Storage shares by an executive and a director.
The current litigation focuses on Silicon Storage's knowing misstatements during the Class Period, the inflationary impact of these misstatements on the stock price, and the subsequent stock price fall after the SEC initiated an investigation.
If you have information about the case, wish to discuss this action or have any questions, please contact Jason S. Cowart (jscowart@pomlaw.com) at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.