D. Joshua Staub, CA No. 170568
WIRTZ & ASSOCIATES
16161 Ventura Blvd., #669
Encino, CA 91436
(310) 576-7770

Plaintiff, by his attorneys, brings this action on behalf of himself and all others similarly situated, and alleges the following upon personal knowledge as to himself and his own activities, and based on investigation conducted by counsel for all other matters. That investigation has included the thorough review of the public filings of P-Com, Inc. ("P-Com" or the "Company") with the Securities and Exchange Commission ("SEC"), published reports and news articles.

1. This is a securities class action brought on behalf of all persons who purchased or otherwise acquired the publicly traded securities of P-Com between April 15, 1997 and September 11, 1998 (the "Class Period"). P-Com supplies equipment and services for access to worldwide telecommunications and broadcast networks. This action arises out of defendants' dissemination of false and misleading statements about P-Com's business, operations and prospects, which statements were made for the purpose of artificially inflating P-Com's stock price and thereby allowing the Individual Defendants¹ to sell over 672,000 shares of their P-Com stock at prices as high as $23 per share for proceeds of more than $13.1 million and allowing P-Com to use (sell) $42 million worth of P-Com stock as currency to acquire Central Resources Corporation ("CRC"), RT Masts Limited ("RT Masts") and Telematics, Inc. ("Telematics").²

2. In mid-May 1998, P-Com shares began a precipitous decline, falling 65% from $20 in mid-May to $7 in July, as it began to leak out that P-Com's earnings would fall short of analysts' estimates for second quarter 1998 ("2Q98"). Then, on July 16, 1998, the defendants confirmed the foregoing suspicions by stating that "due to the intensely competitive environment for [the Company's] point-to-point . . . radio products," P-Com would earn a mere $0.01 per share for 2Q98 versus earnings per share of $0.10 in 2Q97, missing analyst expectations of $0.15. P-Com's stock price fell to around $7 upon this revelation, a 76% decline from its Class Period high, as defendants attempted to affect a "soft landing," i.e., slowly revealing the true extent of their false statements and the reasons for P-Com's horrible financial performance in order to avoid liability from victimized P-Com shareholders. As a result of defendants' piecemeal disclosure, P-Com's stock price continued to be artificially inflated throughout the remainder of the Class Period as defendants maintained that P-Com's revenues would grow 13%-14% in 1998. On September 11, 1998, P-Com finally admitted all that it knew, that it would: (i) completely restructure its business; (ii) cut its work force by 10%; (iii) cut management's pay by 10%; (iv) write off $5-$30 million in inventory; and (v) experience declining 1998 revenues. Upon this revelation, P-Com stock again collapsed and has since traded in the $2-$4 range. Thus, during the Class Period, P-Com stock declined 90% in price, wiping out hundreds of millions of dollars in P-Com's market capitalization.

3. By the spring of 1997, each of the Individual Defendants named herein had recognized that due to several factors, P-Com was experiencing a dramatic slowdown in the rate of growth in its core point-to-point radio business. As rumors about P-Com's slowing growth reached the market, the price of P-Com stock dropped by almost 33% to less than $15 per share. The defendants realized that if they disclosed the truth and confirmed that the rate of growth had fallen, the price of P-Com stock would completely collapse, as the defendants had led the securities markets to expect continuing strong sequential revenue growth from P-Com. The prospect of a sudden decline in the price of P-Com common stock concerned defendants since a substantial portion of their wealth consisted of P-Com stock, and any decline in P-Com's share price would result in substantial financial harm to each of the defendants. Moreover, the defendants' plan to move away from primary reliance on P-Com's core point-to-point radio business was predicated upon P-Com's ability to complete several acquisitions, and reinflating the price of P-Com's shares was instrumental to defendants' plan as it would enable P-Com to close such acquisitions on a non-dilutive basis.

4. Thus, in an effort to stave off any decline in the price of P-Com's common stock, the defendants began issuing a series of false and misleading statements concerning P-Com's operations while simultaneously offering extraordinarily lenient credit terms to customers in order to continue to post revenue growth in line with P-Com's historical rate of growth - even in the face of severe price competition. Although this strategy caused P-Com's accounts receivable to balloon, it nevertheless enabled P-Com to continue to post sequential revenue gains and, more importantly, report stable gross profit margins which thereby provided the Individual Defendants the necessary platform to represent to the securities markets that P-Com was unaffected by the fierce price competition occurring in P-Com's markets. Defendants' misconduct allowed them to artificially inflate and maintain the price of P-Com stock long enough to: (i) acquire CRC, RT Masts, and Telematics for a total of $42 million in inflated P-Com stock, thereby allowing P-Com to move away from its core point-to-point radio business which was suffering severe price competition; (ii) enable the Individual Defendants to sell 672,000 of their P-Com shares - 74% of their aggregate holdings - for $13.1 million; and (iii) allow P-Com to raise $100 million by selling bonds at a 4-1/4% rate of interest - extremely favorable financing terms - due in large part to the fact that the bonds were ultimately convertible into shares of rapidly appreciating P-Com stock.

5. Throughout the Class Period, the defendants issued false and misleading statements to the securities markets for the purpose of selling P-Com shares. For example, defendants represented:

- P-Com was booking multiple new orders and experiencing "strong demand for its entire product line." (BusinessWire, July 17, 1997)

- P-Com's "financial performance continue[d] to meet its internal goals." (BusinessWire, July 17, 1997)

- P-Com's acquisitions were "expected to strengthen P-Com's equipment offerings." (BusinessWire, April 15, 1997)

- P-Com had "made significant progress towards integrating [them] into [its] operations." (BusinessWire, July 17, 1997)

6. Moreover, when P-Com's stock declined in the fourth quarter of 1997 ("4Q97"), such decline was labeled as merely an "overreaction." Defendants further represented that demand for P-Com's products remained "very strong," as P-Com was enjoying "increased market penetration." In fact, defendants claimed that P-Com's acquisitions had "strengthened [its] relationship with [its] customers" and given it "opportunities to further grow business." Based upon this continued strong growth, the defendants assured investors and securities analysts that P-Com would grow its sales in the 35-40% range over the next 3-5 years while maintaining gross margins in the 40%-45% range on its way to achieving earnings per share of $0.15 and $0.75 for 2Q98 and Fiscal Year 1998 ("FY98"), respectively.

7. In fact, during the Class Period, P-Com was experiencing severe price competition from large original equipment manufacturers ("OEM") such as Ericsson Corporation, particularly in its key U.S. and European markets, as certain of P-Com's competitors, which relied on Latin America and Asia as their key markets, looked to the U.S. and European markets to recover sales opportunities they were losing in the deteriorating Latin American and Asian markets. These difficulties were causing P-Com to lower its prices and suffer delays in bookings as customers postponed orders while negotiating - in a clear buyers' market - for the best price available. In order to avoid revealing these problems, defendants falsified P-Com's financial results reported during the Class Period by improperly recognizing revenue and by failing to take write-downs for the excess and obsolete inventory the Company held. On July 16, 1998, when defendants disclosed that P-Com would earn $0.01 versus expectations of $0.15, P-Com stock dropped to $7-7/8. Then, on September 11, 1998, defendants finally revealed that P-Com's entire business needed to be restructured, that it would take a huge inventory write-off of $5-$30 million and that its 1998 sales would decline. Upon these revelations, P-Com stock traded even lower, and has since traded in the $2-$4 per share range.

8. This action arises under Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), 15 U.S.C. §§ 78j(b) and 78t(a), and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder.

9. This Court has jurisdiction over this subject matter pursuant to 28 U.S.C. §§ 1331 and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

10. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act and 28 U.S.C. § 1391(b). Many of the acts and transactions giving rise to the violations of law complained of herein, including the dissemination to the investing public of false and misleading information, occurred in this Judicial District. In addition, P-Com maintains its principal place of business in this District at 3175 South Winchester Blvd., Campbell, California.

11. In connection with the acts, conduct and other wrongs alleged in this Complaint, the defendants, directly and indirectly, used the means and instrumentalities of interstate commerce, including the mails, telephone communications and the facilities of national securities exchanges.

12. Plaintiff Robert Dwyer purchased 6,000 shares of P-Com stock during the Class Period, as evidenced in the attached certification, and was damaged thereby.

13. Defendant P-Com is a Delaware Corporation headquartered in Campbell, California. P-Com is a worldwide supplier of equipment and services for access to telecommunications and broadcast networks. As of November 27, 1998, P-Com had 43.5 million shares outstanding and actively traded on the NASDAQ National Market System ("NASDAQ").

14. Defendant George P. Roberts ("Roberts") was, at all relevant times, Chairman of the Board of Directors and Chief Executive Officer of P-Com. During the Class Period, Roberts sold 240,000 P-Com shares at prices ranging from $19-$21 per share, representing 81% of his P-Com holdings, reaping over $4.7 million.

15. Defendant Pier G. Antoniucci ("Antoniucci") was, at all relevant times, President and Chief Operating Officer of P-Com. During the Class Period, Antoniucci sold 156,558 P-Com shares at prices ranging from $16.69-$22.77 per share, representing more than 73% of his P-Com holdings, reaping over $3 million.

16. Defendant Michael J. Sophie ("Sophie") was, at all relevant times, Chief Financial Officer of P-Com. During the Class Period, Sophie sold 103,528 P-Com shares at prices ranging from $18.50-$21.50 per share, representing 95% of his P-Com holdings, reaping over $2 million.

17. Defendant Kenneth E. Bean, III ("Bean") was, at all relevant times, Senior Vice-President of Quality Assurance of P-Com. During the Class Period, Bean sold 28,296 P-Com shares at prices ranging from $16.69-$19.75 per share, representing 96% of his P-Com holdings, reaping over $516,000.

18. Defendant John R. Wood ("Wood") was, at all relevant times, Vice-President of Advanced Technologies of P-Com. During the Class Period, Wood sold 65,665 P-Com shares at prices ranging from $19.57-$21.00 per share, representing more than 50% of his P-Com holdings, reaping over $1.3 million.

19. Defendant Gill Cogan ("Cogan") was, at all relevant times, a director of P-Com. During the Class Period, Cogan sold 64,000 P-Com shares at prices ranging from $20.55-$20.90 per share, representing more than 56% of his P-Com holdings, reaping over $1.3 million.

20. Defendant John A. Hawkins ("Hawkins") was, at all relevant times, a director of P-Com. During the Class Period, Hawkins sold 14,000 P-Com shares at prices ranging from $16.13-$23.00 per share, representing 100% of his P-Com holdings, reaping over $250,000.

21. The defendants identified in ¶¶ 14-20 above are referred to herein as the Individual Defendants. Because of the Individual Defendants' positions as senior officers and/or directors of P-Com, each knew or had available to him the adverse non-public information about the business of P-Com as well as its finances and future business prospects. This information was available via access to internal corporate documents (including the Company's operating plans, budgets and forecasts and reports of actual operations compared thereto), conversations with other corporate officers and employees, attendance at management and/or full day Board of Directors' meetings and committees thereof and via reports and other information provided to them in connection therewith. During the Class Period the Individual Defendants willfully participated in the issuance of statements which were false and/or misleading for the purposes of offering to sell and selling P-Com securities. The Individual Defendants' participation included the preparation or review of P-Com's false and misleading SEC filings, the preparation of false or misleading press releases and/or the dissemination of false information to securities analysts, money and portfolio managers and institutional investors in conference calls and other presentations.

22. Defendants had a duty promptly to disseminate accurate and truthful information with respect to the Company's operations and financial condition, or to cause and direct that such information be disseminated promptly, and promptly to correct any previously disseminated information that was misleading to the market. Defendants' failure to discharge their duties artificially inflated the value of P-Com common stock during the Class Period and injured Plaintiff and the Class.

23. The Individual Defendants, by reason of their executive and Board positions, were controlling persons of P-Com during the Class Period and had the power and influence, and exercised the same, to cause P-Com to engage in the conduct complained of herein.

24. During the Class Period, each Individual Defendant occupied a position that made him privy to non-public information concerning P-Com. Because of this access, each of these defendants knew the adverse material facts specified herein and that such facts were being concealed.

25. Each of the defendants is liable for making false and misleading statements, and/or for willfully participating in a scheme and course of business that operated as a fraud on purchasers of P-Com common stock and damaged Class members in violation of the federal securities laws. All of the defendants pursued a common goal, i.e., inflating the price of P-Com common stock by making false and misleading statements and concealing material adverse information. The scheme and course of business was designed to and did: (i) deceive the investing public, including Plaintiff and other Class members; (ii) artificially inflate the price of P-Com's common stock during the Class Period; (iii) cause Plaintiff and the other members of the Class to purchase P-Com's common stock at inflated prices and thereby to sustain damages; (iv) allow the Individual Defendants to sell their own P-Com stock for proceeds of over $13.1 million; (v) facilitate the exchange (sale) of $42 million worth of P-Com shares to acquire CRC, RT Masts, and Telematics; and (vi) effectuate the sale of $100 million of P-Com debt securities, which were priced advantageously based upon the artificial inflation in P-Com's stock price.

26. Each defendant had the opportunity to commit and participate in the violations of law described herein. The Individual Defendants were top officers and directors of P-Com and they controlled the Company's press releases, corporate reports, SEC filings and communications with analysts. Thus, the defendants controlled the public dissemination of, and could misrepresent, the information about P-Com's business, products and current and future business prospects that reached the market and the members of the Class and caused the inflation in the price of P-Com's common stock.

27. The Individual Defendants, because of their positions of control and authority as officers and/or directors of the Company, were able to and did control the contents of the various quarterly reports, SEC filings, press releases and presentations to securities analysts pertaining to the Company. Each of the Defendants was provided with copies of P-Com's business plans, management reports, press releases and SEC filings alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and opportunity to prevent their issuance or cause them to be corrected. As a result, each of the Defendants is responsible for the accuracy of the public reports and releases detailed herein as "group published" information and is therefore responsible and liable for the representations contained therein.

28. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3) on behalf of the Class, consisting of all persons or entities who purchased the common stock of P-Com during the Class Period, April 15, 1997 through September 11, 1998, inclusive. Excluded from the Class are defendants, the officers and directors of the Company at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which defendants have or had a controlling interest.

29. Because millions of shares of P-Com common stock were outstanding during the Class Period, and because the Company's stock was actively traded on the NASDAQ during the Class Period, the members of the Class are so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes that there are at least hundreds of members of the Class and that they are geographically dispersed.

30. Plaintiff's claims are typical of the claims of the members of the Class as all members of the Class were similarly affected by defendants' wrongful conduct in violation of federal securities laws as complained of herein.

31. Plaintiff will fairly and adequately protect the interests of the members of the Class and have retained counsel competent and experienced in class and securities litigation.

32. Common questions of law and fact exist as to all the members of the Class and predominate over any questions solely affecting individual members of the Class. Among the questions of law and fact common to the Class are:

(a) Whether the federal securities laws were violated by defendants' acts as alleged herein;

(b) Whether defendants participated in and pursued the common course of conduct complained of herein;

(c) Whether the defendants' publicly disseminated releases and statements during the Class Period misrepresented and/or omitted material facts which were necessary in order to make the representations made therein not misleading;

(d) Whether the defendants acted willfully and/or recklessly in omitting and/or misrepresenting material facts;

(e) Whether the market price of P-Com common stock was artificially inflated during the Class Period due to the material misrepresentations and omissions complained of herein; and

(f) To what extent the members of the Class have sustained damages and the proper measure of damages.

33. A class action is superior to all other available methods for the fair and efficient adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the damages suffered by the individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this class action.

34. Because the Private Securities Litigation Reform Act of 1995, Section 21(D) of the Exchange Act [15 U.S.C. §78u-4(c)] requires complaints to be pled in conformance with Federal Rule of Civil Procedure 11, Plaintiff has made the foregoing allegations, other than those in paragraph 12 concerning the named Plaintiff, based upon the investigation of Plaintiff's counsel, which included a review of P-Com's SEC filings, securities analysts' reports and advisories about the Company, press releases issued by the Company, media reports about the Company, and publicly disseminated documents concerning P-Com's competitors and customers. Pursuant to Rule 11(b)(3), Plaintiff believes that after a reasonable opportunity for discovery substantial additional evidentiary support will exist for the allegations set forth herein.

35. FRAUD ON THE MARKET ALLEGATIONS At all relevant times, the market for P-Com stock was an efficient market for the following reasons, among others:

(a) At all relevant times during the Class Period, P-Com common stock was listed and actively traded on a highly efficient, national stock market. The Company's stock traded on the NASDAQ; and

(b) As a registered and regulated issuer of securities, P-Com filed periodic reports with the SEC and NASD, in addition to the frequent, voluntary dissemination of information described in this Complaint.

36. As a result of the above, the market for P-Com securities promptly digested current information from all publicly available sources and reflected such information in P-Com's stock prices. Under these circumstances, all purchasers of P-Com stock during the Class Period suffered similar injury upon their purchase of P-Com stock after defendants' manipulative activities artificially inflated the price of P-Com stock. Plaintiff and the Class were unaware of these manipulative practices, and justifiably relied on the presumption of market integrity.

37. The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the allegedly false forward-looking statements pleaded in this Complaint. The Safe Harbor does not apply to false financial statements. Also, none of the forward-looking statements pleaded herein were identified as "forward-looking statements" when made. Nor was it stated that actual results "could differ materially from those projected." Nor did meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements accompany those forward-looking statements. Each of the forward-looking statements alleged herein was made by or authorized by an executive officer of P-Com, and was actually known by each of the Individual Defendants to be false when made.

38. On April 15, 1997, P-Com announced, over BusinessWire, that for 1Q97, it had earned $0.08 per share on sales of $38.1 million versus $0.04 per share on sales of $17.6 million in 1Q97. Defendant Roberts stated:

Customer demand for P-Com products remains strong. P-Com achieved its 14th consecutive quarter of revenue growth in supporting our customers' equipment needs. Similarly, as we have experienced in the past, we continued to significantly increase our research and development expenditures to develop new products to meet customers' requirements.

39. On June 25, 1997, P-Com issued a release over BusinessWire stating that it had acquired CRC for 1.5 million P-Com shares valued at $22 million. Defendant Roberts was quoted as saying:

This acquisition is expected to strengthen P-Com's equipment offerings to network service providers by allowing us to deliver more functionality with our next generation radios . . . .

This broadening of our customer base results in $6.5 million in orders and includes organizations utilizing wireline access technology.

40. On July 17, 1997, P-Com issued a release over BusinessWire reporting that it earned $4.2 million or $0.10 per share for 2Q97, versus $1.5 million or $0.04 per share for the comparable period of the previous year. Defendant Roberts stated:

We continue to see strong demand for our entire product line as we further expand our geographic presence. We have close relationships with our customers which allow us to respond quickly to their evolving needs with new products and services.(Emphasis added).

Defendant Sophie added:

Our financial performance continues to meet our internal goals. We have made significant progress towards integrating our recent acquisitions into our operations, and we are already beginning to see synergies in our product development and sales efforts.

41. The statements made by defendants between April 15, 1997 and July 17, 1997 were false and misleading when made, as they failed to disclose the following facts which were then known by or available to defendants based upon their access to internal P-Com data, including that:

(a) The acquisition of CRC was not designed to "strengthen P-Com's equipment offerings" but was, in fact, a defensive acquisition designed to diversify P-Com away from its core point-to-point radio business, which was experiencing a dramatic decline in its growth rate due to severe price competition, especially for the key Tel-link point-to-point radio;

(b) P-Com's financial results had exceeded analysts expectations only by shipping $2.9 million of product to one of its customers, Advanced Radio, which product was not needed and was accepted by Advanced Radio only on a risk-free basis with a right to return any unused product; and

(c) As a result of (a)-(b) above, P-Com's 2Q97 sales, gross margins and assets were overstated by at least $2.9 million.

42. On August 22, 1997, P-Com announced, over BusinessWire, that it received purchase orders "valued in excess of $8 million to supply digital millimeter wave radio systems and associated services to its major Personal Communication Networks ("PCN") customers in the United Kingdom."

43. On August 22, 1997, P-Com also announced a 2-for-1 stock split over BusinessWire. The defendants caused this split in order to send a positive sign to the market that P-Com's business was strong. This split was thus designed to, and did, serve as a device to artificially manipulate the price of P-Com common stock upwards.

44. In a September 3, 1997 BusinessWire press release, P-Com announced that it received additional orders from a major OEM distributor for applications in the Middle East valued in excess of $5 million for the supply of digital millimeter wave radio systems and associated services.

45. On September 10, 1997, P-Com announced, over BusinessWire, that its Italian subsidiary had received orders with a combined value in excess of $6.2 million for a project in the GMA Network in the Philippines and another project for the Royal Norwegian Air Force.

46. On September 25, 1997, P-Com announced that it had received purchase orders from its German system integrator for the supply of digital millimeter wave radio systems and associated services. These purchase orders, valued in excess of $5.5 million, were in addition to the $8.5 million order previously announced for delivery in 1997.

47. On October 7, 1997, in anticipation of its planned release of lower-than-expected results for the quarter ended September 30, 1997, P-Com announced, over BusinessWire, that it had adopted a shareholder rights plan. Purportedly, defendants had enacted the plan to assure that all stockholders receive fair and equal treatment in the event of any proposed takeover of the Company and to guard against partial tender offers, squeeze-outs, open market accumulations and other abusive tactics to gain control of the Company. The reality was that the Individual Defendants did not want to lose control of P-Com when its stock ultimately collapsed upon the revelation of the true state of P-Com's business.

48. In an October 16, 1997 BusinessWire press release, P-Com announced 3Q97 earnings of $5.1 million or $0.12 per share versus $2.5 million or $0.06 per share during the comparable period of the previous year. While P-Com's revenues were below analysts' estimates, the Company nevertheless managed to meet analysts' earnings per share estimates because P-Com's gross profits margins were 90 basis points higher than analyst estimates and unexpectedly surged from 40.8% to 43.3%. Defendant Roberts stated:

Demand for P-Com products and services increased during the third quarter. Our strategy for providing systems for worldwide network solutions generated market penetration and created opportunities in new regions around the world. Emphasis added).

Additionally, in connection with the release, defendant Sophie stated: r [sic] acquisition strategy continued to expand our product and service presence with our customer base.

49. Defendants realized that despite their positive "spin" on P-Com's 3Q97 results, P-Com's stock would likely decline based on the first October 16, 1997 announcement due to the revenue shortfall. As a result, in a further effort to avoid a collapse in P-Com's stock price, defendants issued a second BusinessWire release on October 16, 1997, which stated that P-Com's Italian subsidiary had received a $20 million order for the construction of a complete broadcast network for a group of private companies located in Papua, New Guinea. Defendants also announced that subject to market conditions, i.e., only if favorable financing terms existed, P-Com planned to raise $150 million through a private placement of convertible subordinated notes.

50. The statements made by defendants between August 22, 1997 and October 16, 1997 were each false and misleading when made, as they failed to disclose the following facts which were then known by or available to defendants based upon their access to internal P-Com data, including that:

(a) P-Com was experiencing severe pricing pressures from its competitors, such as Digital Microwave, Innova, Alcatel, Nokia and Ericsson;

(b) Several of the numerous "orders" P-Com was announcing were only achieved as a result of P-Com offering lenient payment terms and these "orders" did not signify P-Com's health but its weakness;

(c) As a result of the compensation pressure, P-Com was forced to extend lenient payment terms in order to maintain its historical rate of growth without reducing gross profit margins;

(d) P-Com was so concerned about its days' sales outstanding and the risk it imposed upon the Company (principally a reduction in cash flow but also significant credit risk), it had hired a new Vice President of Operations in August 1997 to specifically address the problem;

(e) P-Com again shipped another $2.1 million worth of product to Advanced Radio in 3Q97, which product Advanced Radio did not need and accepted on a risk-free basis and with a right of return;

(f) As a result, P-Com's 3Q97 revenue, accounts receivables, and gross margins were overstated by an additional $2.1 million in 3Q97.

(g) P-Com's gross margins were artificially inflated and overstated because they had extended ultra-lenient credit terms in order to achieve sales and made at least $2.1 million in shipments to certain of its customers, including Advanced Radio; and

(h) P-Com continued to experience severe pricing pressures in its point-to-point products, particularly its Tel-Link Radios, which were causing its actual gross profit margins to decline.

51. On October 17, 1997, the price of P-Com shares fell by $6. However, P-Com stock continued to trade at artificially inflated levels throughout the remainder of the Class Period as defendants maintained that P-Com's business fundamentals remained intact and that P-Com's management remained able to manage P-Com's business. For example, in a Dow Jones News Service press release on October 17, 1997, defendant Roberts stated:

This is really [a] huge overreaction . . . . We sort of got caught in the draft here.

We're dedicated to continuing to running (the company) regardless of what Wall Street does . . . . We don't know what Wall Street does. All we know is how to run our business. (emphasis added).

52. On October 22, 1997, P-Com announced in a press release over BusinessWire that it had secured orders valued in excess of $3.9 million from various customers for the new line of spread spectrum radios designed for unlicensed point-to-point applications.

53. On October 24, 1997, P-Com issued a release over Select Federal Filing Newswires announcing that it had canceled a $150 million note offering. Karl Spurzen, P-Com's Director of Investor Relations, stated:

We have decided not to pursue this transaction at this time . . . . The stock is down substantially (and) is at a level that is not attractive to the market...

54. On November 3, 1997, P-Com issued a BusinessWire release that stated it had secured an additional $2.0 million in bookings for its point-to-point spread spectrum product to its system integrator in Canada. Defendant Roberts stated:

The addition of our Spread Spectrum product line gives P-Com the ability to provide radios from 2.4 GHz up to 50 GHz which we believe to be the broadest radio offering in the industry. Complementing this equipment with our services capability of over 200 people in the field gives P-Com an advantage over our many competitors in terms of customer support and capability . . . .

55. On November 3, 1997, P-Com also announced over BusinessWire that it had signed an agreement with CEL Polska S.p.Z.o.o. to provide 38 GHz and 23 GHz point-to-point millimeter wave radios and associated services to Poland as access equipment for their networks. The three-year agreement began with initial orders valued in excess of $1 million. Defendant Antoniucci stated:

With this agreement P-Com reaps the initial reward of the marketing campaign started earlier in the year with the purpose of establishing a direct presence in the selected markets of Eastern Europe . . . .

56. On November 5, 1997, P-Com announced in a press release over BusinessWire that it had sold $100 million of 4-1/4% convertible subordinated notes due 2002 (convertible into common stock of the Company at a conversion price of $27.46 per share), in a private placement. The Company stated that it intended "to use the net proceeds principally to fund acquisitions, to pay down and terminate the Company's line of credit as well as certain long-term debt, for working capital, capital expenditures and other general corporate purposes."

57. On December 1, 1997, P-Com issued a BusinessWire release announcing that it had received a purchase order valued in excess of $8 million from Winstar Communications for the supply of digital millimeter wave radios for 4Q97 and 1Q98. Defendant Roberts stated:

Winstar Communications has been and continues to be a highly valued customer of P-Com. We are very pleased to be able to continue to support their aggressive needs as their buildout efforts continue . . . .

58. On December 8, 1997, P-Com issued a BusinessWire release announcing that it had completed the acquisition of Telematics, a Virginia-based company and RT Masts, a United Kingdom-based company. Telematics was acquired for $5 million dollars in P-Com common stock and RT Masts was acquired for $15 million in P-Com common stock. Defendant Roberts stated:

The completion of these acquisitions marks a significant step toward our goal of broadening P-Com's abilities to meet our customers' requirements and helps to further establish P-Com as a provider of worldwide network solutions . . . .

59. On December 10, 1997, P-Com issued a BusinessWire release announcing that it had received an order valued in excess of $9 million from Telkom S.A. Limited, South Africa's largest telecommunications company. Defendant Roberts stated:

We are pleased to add a high quality company such as Telkom to our customer base and expand our geographical coverage to a very important part of the world . . . .

60. On January 22, 1998, P-Com issued a BusinessWire release announcing 4Q97 earnings of $8.1 million or $0.18 per share versus $4.9 million or $0.11 per share in the comparable period of the previous year. Defendant Roberts stated:

Demand for P-Com products and services was very strong for the fourth quarter. For operations activities, we have added 57,000 square feet of capacity in the Silicon Valley and dedicated approximately 30,000 square feet in Italy. In addition, P-Com continues to spend heavily in research and development to provide the products and services our customers desire. These efforts have resulted in increased market penetration, geographical coverage and a year end backlog of $65.2 million.

In the release, defendant Sophie also stated:

Our strategy of providing service capabilities to complement our equipment offering, in response to customer requests, allows P-Com to offer network solutions and increased value to our customers. We believe this will continue to strengthen our relationship with our customers. (Emphasis added).

61. The statements made by defendants between October 17, 1997 and January 22, 1998 were false and misleading when made, as they failed to disclose the following facts which were then known by or available to defendants based upon their access to internal P-Com data, including that:

(a) P-Com had only achieved its 4Q97 numbers by providing last-minute sales Incentives, including lenient financing terms to its customers;

(b) P-Com was facing severe pricing pressure from its competitors - including Digital Microwave, Innovan, Ericsson and Alcatel;

(c) The rate of growth in P-Com's core point-to-point radio business had slowed dramatically due to severe pricing pressure on the Tel-Link point-to-point radio product;

(d) It was only through the additional revenues secured through P-Com's acquisition of RT Masts, Telematics and CRC the P-Com was able to achieve 4Q97 revenue forecasts;

(e) P-Com sold $100 million in notes because it was hemorrhaging cash and desperately needed additional cash to survive;

(f) To reduce its accounts receivables, P-Com was engaging in a process of factoring -- i.e., selling off its accounts receivables at increasing discounts in an attempt to convert P-Com's receivables into badly needed cash while concealing the true deterioration in P-Com's balance sheet;

(g) As a result of the significant difficulties in the point-to-point market, particularly in P-Com's key U.S. market, several of P-Com's key customers -- including Orange PLC, One-2-One and Mannessman -- had informed P-Com that they would likely delay scheduling their 1998 orders until all market participants had the opportunity to bid;

(h) The November 3, 1998 announcement regarding the $1 million agreement to provide 38 Ghz ratio to CEL Polska was false and misleading because it failed to reveal the 38 Ghz products were sold under severe pricing pressures and thus sold at thin or non-existent margins;

(i) As a result of (a) - (h), P-Com's gross margins were actually declining as P-Com was forced to compete on price to achieve sales; and

(j) As a result of (a) - (h), the visibility of P-Com's revenues and earnings in 1998 was declining.

62. On February 25, 1998, P-Com issued a BusinessWire release announcing an agreement with an initial $4 million purchase order for point-to-multipoint digital millimeter wave radio systems from a major European tele-communications equipment manufacturer and systems provider. In connection with the release, defendant Roberts stated: "We are proud of the recognition our technology has received by such an important world wide telecommunications equipment and systems provider...."

63. On April 1, 1998, P-Com issued a BusinessWire press release announcing that P-Com had completed the acquisition of the assets of Wireless Communications Group of Cylink Corp. for $46 million in cash and a $14.5 million note. Defendant Roberts stated:

This acquisition provides us with products that complement and broaden our existing digital millimeter wave product lines. We are also pleased to have such a talented group join us at P-Com. Their skills and experience are a great addition to our existing technical capabilities....

Defendant Sophie stated:

We believe that the global distribution network that we gain in this acquisition will provide future opportunities for our existing product lines. We see a growing number of opportunities for our products and services around the globe. This acquisition will strengthen P-Com's position and ability to capture these opportunitiesŠ(Emphasis added).

64. On April 16, 1998, P-Com issued a release over BusinessWire announcing 1Q98 earnings of $5.1 million or $0.12 per share (excluding one time charges) versus $1.7 million or $0.04 per share in the comparable quarter of the previous year. Defendant Roberts stated:

Our efforts in the quarter were highlighted by successfully completing the acquisition of certain of the assets of the Wireless Communications Group from Cylink Corporation.

We believe this transaction will position P-Com well in important regions of the world where we can leverage our technology, products and services. Globally, demand remained strong during the quarter for point-to-point and spread spectrum radio products as deregulation trends have continued to provide opportunities to further grow our business.

Defendant Sophie stated:

We believe the successful operating results for the quarter which included a 33% sales growth and 200% earning per share growth as compared to the first quarter of 1997 are indicative that our strategies of customer-oriented research and development and acquisitions which focus on complementary products, increased marketing channels, and new technology are delivering positive results. (Emphasis added).

65. On April 16, 1998, P-Com also issued a press release over BusinessWire announcing that it had signed a memorandum of understanding with a major European telecommunications company for the joint development of an ATM-based point-to-multipoint radio system. The jointly developed product would address the needs of the wireless broadband access market on a worldwide basis. Defendant Roberts stated:

P-Com has a leadership position in point-to-multipoint technology and our partner is equally strong in the switching and ATM technologies. This combined development effort will provide a timely and cost effective solution for networks around the world....

66. On April 19, 1998, P-Com was featured in an article in the Knight-Ridder Tribune Business News and the San Jose Mercury News. In the article, defendant Roberts was reported to have stated that P-Com would be a $1 billion company in five years, largely through acquisitions. Defendant Roberts stated:

We're still in the 'Collecting' phase.... We have an international management team that knows how to make the right acquisitions and meld them together. We stay focused on what we're doing....

67. The statements made by defendants between February 25, 1998 and April 19, 1998 were false and misleading when made, as they failed to disclose the following facts which were then known by or available to defendants based upon their access to internal P-Com data, including that:

(a) P-Com was experiencing severe pricing pressure in its point-to-point business across the board, and in particular in the U.S. and European markets, as P-Com's competitors were intensely focusing on the U.S. and European markets in an effort to replace lost sales opportunities in the Asian and Latin American markets which served as the key sales markets for P-Com's competitors;

(b) As a result of the intense price competition, P-Com's existing customers, and in particular new customers, were delaying orders to obtain more favorable prices;

(c) P-Com's key point-to-point products, the Tel-Link and 38 Ghz radios, were under severe price pressures;

(d) As P-Com struggled for sales, it continued to extend ever more lenient payment terms to customers which again caused its days' sales outstanding to balloon, as sales were booked as accounts receivable and customers delayed paying on them, causing severe cash flow problems;

(e) As a result, P-Com's cash levels were declining to alarming levels and P-Com's cash flow was woefully inadequate;

(f) As a result of (a)-(d), P-Com's inventory rose by 29% in 1Q98 -- including $26.18 million in finished goods inventory -- which only exacerbated P-Com's cash flow problems;

(g) The severe erosion in P-Com's point-to-point business necessitated huge R&D expenditures on P-Com's point-to-multipoint business, which was behind schedule and could not be delayed, and thus further exacerbated P-Com's cash flow problems;

(h) As a result of (a)-(g), it was impossible for P-Com to achieve EPS of $0.15 in 2Q98 or $0.72 in FY98.

68. On April 27, 1998, P-Com issued a BusinessWire press release announcing a new generation of point-to-point radios designed to exploit new technology to broaden the application range of the present Tel-link(r) series. Defendant Antoniucci stated:

The new point-to-point microwave and millimeter wave radio generation, in association with the point-to-multipoint product plus the complete offerings of spread spectrum radio extended upward to 4T1 and 4E1 and downward to 19 Kb/s, makes P-Com a unique one stop-shop vendor for wireless operators....

69. On April 30, 1998, P-Com issued a press release over BusinessWire and announced that it had received orders worth more than $11 million for products associated with spread spectrum radios, which operate in the unlicensed frequency band of 2.4 and 5.7 Ghz. Defendants Roberts stated:

The market for spread spectrum radio products is robust. The order flow and amount of bid activity demonstrates the strategic value of adding this product to the P-Com product family....

Defendant Sophie stated:

We are pleased with the progress we have made in increasing our presence in the spread spectrum market and feel we are well positioned to pursue this market opportunity....

70. On June 17, 1998, Defendant Roberts, in an interview with The Wall Street Corporate Reporter, stated:

We will continue to do acquisitions because the vision of the company is to be a billion-dollar company by the end of the year 2003. We will do that through internal growth and acquisition.

* * *

I would show them the history of P-Com and would show them how the investors who invested in us early on have profited. I would then try to get them involved with our management team to prove to them that we have the very best management team for an international company in telecom that you will find. That should give them the comfort that we really do know how to steer this business to the billion-dollar mark. I would demonstrate our equipment for them, as we have done in the past, because that seems to work. (Emphasis added).

71. The statements made by defendants between April 27, 1998 and June 17, 1998 were false and misleading when made, as they failed to disclose the following facts which were then known by or available to defendants based upon their access to internal P-Com data, including that:

(a) P-Com was experiencing severe pricing pressure in its point-to-point business in its key U.S. and European markets as its competitors, who relied on the Latin American and Asian markets as their key markets, were intensely focusing on the U.S. and European markets in an effort to replace lost sales opportunities in the Asian and Latin American markets;

(b) As a result of the intense price competition, P-Com's major U.S. and European customers, and in particular new customers, were delaying orders to obtain more favorable prices;

(c) As P-Com struggled for sales, it continued to extend ever more lenient payment terms to customers which again caused its days' sales outstanding to balloon as sales were booked as accounts receivable and customers delayed paying on them, causing severe cash flow problems;

(d) As a result, P-Com's cash levels were declining to alarming levels and its cash flow was inadequate;

(e) While demand for P-Com's spread spectrum products was robust, demand for P-Com's Tel-Link and 38Ghz products, which were far more significant to P-Com as they represented over 60% of P-Com's revenues, were under severe price pressure; and

(f) As a result of (a)-(e), P-Com's inventory rose by 29% in 1Q98 -- including $26.18 million in finished goods inventory -- which only exacerbated P-Com's cash flow problems.

72. On July 16, 1998, P-Com shocked the securities markets when it disclosed, over the BusinessWire, that P-Com would earn only $0.01 per share in 2Q98, 93% lower than the $0.15 per share the defendants had led the market to expect, citing "the intensely competitive environment for point-to-point (PTP) radio products." P-Com also disclosed that its gross profit margins had declined from the "strong" 40%-45% level defendants had repeatedly boasted about during the Class Period to a mere 38% and that its days' sales outstanding had ballooned to 113 days as its accounts receivable rose to $79 million. When P-Com opened trading on July 17, 1998, the price of P-Com stock traded approximately 63% lower than its mid-May 1998 levels, or at approximately $7 per share. However, the price of P-Com shares continued to trade at artificially inflated levels throughout the remainder of the Class Period as defendants continued to maintain that P-Com's business was solid and revenues would grow by 13%-14% in 1998.

73. Finally, on September 11, 1998, P-Com once again shocked the securities markets when it revealed, in a BusinessWire press release, that it was reducing its entire work force by 10%, cutting its executive salaries by 10%, taking a huge inventory write-down of $5-$30 million and that its 1998 sales would decline from 1997 levels as it would suffer a $0.39 loss in 3Q98 versus the expectation of breakeven results. Upon the dissemination of this information, P-Com stock again declined and has since traded as low as $2 per share.

74. P-Com's insiders issued false and misleading statements about P-Com's business for the purpose of selling over 670,000 shares for proceeds of over $13.1 million, profiting handsomely from the artificial inflation of P-Com's stock price their false statements had created. Notwithstanding their access to non-public information as a result of their positions with P-Com, the Individual Defendants sold the following amounts of P-Com shares at artificially inflated prices throughout the Class Period while in possession of material non-public information:

Defendant	Shares Sold	Aggregate Proceeds ($millions)	Shares Sold In Class Period
Roberts, G.	240,000	4.70	81%
Antoniucci, P.	156,558	3.00	73%
Sophie, M.	103,528	2.00	95%
Bean, K.	28,296	0.50	96%
Wood, J.	65,665	1.30	50%
Cogan, G.	64,000	1.30	56%
Hawkins, J.	14,000	0.25	100%
Total	672,047	13.05	74%
Acquisitions		42.00
Debt Offering		155.1
Total		197.1

86. P-Com also benefitted handsomely from the artificial inflation in the price of P-Com's common stock. P-Com raised $100 million by selling convertible bonds and by using P-Com's inflated stock as a currency to complete three acquisitions for stock valued at $42 million, enabling P-Com to diversify away from P-Com's core point-to-point radio business, which was experiencing a declining rate of growth and severe price competition.

87. To inflate the price of P-Com's stock, defendants caused the Company to falsely report its results for 1997 and 1Q98 by improperly recognizing revenue and failing to adequately accrue for excess and obsolete inventory, thereby materially overstating its revenue, net income and EPS in 1997 and 1Q98. 88. P-Com reported the following amounts for interim periods during FY97:

	1Q1997	2Q1997	3Q1997	4Q1997	1Q1998
Revenue	$38.1MM	$48.9MM	$51.5MM	$64.2MM	$58.6MM
Net Income	$3.0MM	$4.2MM	$5.1MM	$8.1MM	$5.1MM
E.P.S.	$0.8MM	$0.1MM	$0.12MM	$0.18MM	$0.12MM

89. P-Com included its interim 1997 and 1998 results in Form 10-Q's which it filed with the SEC. With regard to the financial information included in the Form 10-Q's, P-Com represented:

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of P-Com, Inc.'s (referred to herein together with its wholly-owned and partially-owned subsidiaries, as "P-Com" or the "Company") financial condition as of [periods presented], and the results of its operations, and its cash flows for the six month periods ended [periods presented].

90. These representations were false and misleading when made, as P-Com's financial statements for 1997 and 1Q98 did not present fairly P-Com's results and which results were presented in violation of GAAP and SEC rules.

91. GAAP are those principles recognized by the accounting profession as the conventions, rules and procedures necessary to define accepted accounting practice at a particular time. SEC Regulation S-X (17 C.F.R. 210.4-01 (a)(1)) states that financial statements filed with the SEC which are not prepared in compliance with GAAP are presumed to be misleading and inaccurate, despite footnotes or other disclosures. Regulation S-X requires that interim financial statements must also comply with GAAP, with the exception that interim financial statements need not include disclosure which would be duplicative of disclosures accompanying annual financial statements. 17 C.F.R 210.10-01(a).

92. The Individual Defendants caused P-Com to falsify its reported financial results through improper revenue recognition of P-Com's shipments of its products to customers, including Advanced Radio, while granting to the customers an unconditional right to return unused product. Pursuant to GAAP, P-Com should have deferred recognition of revenue on such shipments until the product was used (or there was an unconditional commitment to buy it by the customers), but did not in order to inflate its reported results. Moreover, pursuant to GAAP, P-Com was required to adequately accrue losses for excess and obsolete inventory, but did not in order to report growing EPS during the Class Period.

93. GAAP, as set forth in FASB Statements of Accounting Standard ("SFAS") No. 48, Revenue Recognition When Right of Return Exists, prohibits the recognition of revenue when the right of return exists unless certain conditions are met. SFAS No. 48 applies to transactions "in which a product may be returned, whether as a matter of contract or as a matter of existing practice." SFAS No. 48, ¶3. SFAS No.48, ¶6 states:

If an enterprise sells its product but gives the buyer the right to return the product, revenue from the sales transaction shall be recognized at time of sale only if all of the following conditions are met:

a. The seller's price to the buyer is substantially fixed or determinable at the date of sale.

b. The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.

94. GAAP, as set forth in Accounting Research Bulletin ("ARB") No.43, Inventory, requires that where the value of inventory declines below cost, the difference between cost and value (whether due to obsolescence, price changes or other causes) be accrued as a loss in the period it becomes evident. ARB No. 43, Statement No. 5.

95. Despite granting the right to return unused product to its customers, P-Com improperly recognized at least $5 million in revenue during the first three quarters of 1997 and failed to adequately accrue losses for excess and obsolete inventory in 1997 and 1Q98 in order to inflate its reported results, in contravention of GAAP. Even as P-Com's inventory balance grew disproportionately to sales, P-Com failed to take adequate reserves to reflect the excess and obsolete inventory the Company was accumulating. The Company's inventory turnover declined from one time per quarter at the beginning of the Class Period to less than .6 times per quarter by 1Q98.

96. Ultimately, in the quarter ended September 30, 1998, P-Com will have to write-down its inventories by millions of dollars, and its sales will be much weaker than in prior quarters, partly due to the improper revenue recognition practices of prior quarters. Absent the Company's accounting practices, P-Com would have reported materially lower earnings than it actually reported in 1997, at least $1 million lower in 3Q97 and at least $2 million lower and $2.5 million lower in 4Q97 and 1Q98, respectively.

97. Due to these accounting improprieties, the Company presented its financial results and statements in a manner which violated GAAP, including the following fundamental accounting principles:

(a) The principle that interim financial reporting should be based upon the same accounting principles and practices used to prepare annual financial statements was violated (APB No. 28, ¶10);

(b) The principle that financial reporting should provide information that is useful to present and potential investors and creditors and other users in making rational investments, credit and similar decisions was violated (FASB Statement of Concepts No. 1, ¶34);

(c) The principle that financial reporting should provide information about the economic resources of an enterprise, the claims to those resources, and effects of transactions, events and circumstances that change resources and claims to those resources was violated (FASB Statement of Concepts No. 1, ¶40);

(d) The principle that financial reporting should provide information about how management of an enterprise has discharged its stewardship responsibility to owners (stockholders) for the use of enterprise resources entrusted to it was violated. To the extent that management offers securities of the enterprise to the public, it voluntarily accepts wider responsibilities for accountability to prospective investors and to the public in general (FASB Statement of Concepts No. 1, ¶50);

(e) The principle that financial reporting should provide information about an enterprise's financial performance during a period was violated. Investors and creditors often use information about the past to help in assessing the prospects of an enterprise. Thus, although investment and credit decisions reflect investors' expectations about future enterprise performance, those expectations are commonly based at least partly on evaluations of past enterprise performance (FASB Statement of Concepts No.2, ¶¶58-59);

(g) The principle of completeness, which means that nothing is left out of the information that may be necessary to insure that it validly represents underlying events and conditions was violated (FASB Statement of Concepts No. 2, ¶79); and

(h) The principle that conservatism be used as a prudent reaction to uncertainty to try to ensure that uncertainties and risks inherent in business situations are adequately considered was violated. The best way to avoid injury to investors is to try to ensure that what is reported represents what it purports to represent (FASB Statement of Concepts No.2, ¶¶ 95,97).

98. Further, the undisclosed adverse information concealed by defendants during the Class Period is the type of information which, because of SEC regulations, regulations of the national stock exchanges and customary business practice, is expected by investors and securities analysts to be disclosed and is known by corporate officials and their legal and financial advisors to be the type of information which is expected to be and must be disclosed.

99. Plaintiff incorporates by reference and realleges all paragraphs previously alleged herein, and asserts these claims against all Defendants.

100. During the Class Period, defendants, individually and in concert, engaged in a plan, scheme and course of conduct, pursuant to which they knowingly and/or recklessly engaged in acts, transactions, practices and courses of business which operated as a fraud upon Plaintiff and other members of the Class, and made various untrue statements of material fact and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading to Plaintiff and other Class members as set forth above. The purpose and effect of said scheme was to induce Plaintiff and the members of the Class to purchase the Company's common stock during the Class Period at artificially inflated prices.

101. By reason of the foregoing, defendants knowingly and recklessly violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that they themselves or a person whom they controlled: (a) employed devices, schemes and artifices to defraud; (b) made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c) engaged in acts, practices and a course of business that operated as a fraud or deceit upon Plaintiff and other members of the Class in connection with their purchases of P-Com's common stock during the Class Period.

102. Each of the defendants participated in and joined the alleged scheme and course of conduct specified above and each is liable primarily for the aforesaid wrongful acts and statements specified above.

103. As a result of the foregoing, the market price of the Company's common stock was artificially inflated during the Class Period. In ignorance of the false and misleading nature of the representations described above, Plaintiff and other members of the Class relied, to their damage, directly on the misstatements or on the integrity of the market both as to price and as to whether to purchase these securities. Plaintiff and the other members of the Class would not have purchased P-Com securities at the market prices they paid, or at all, if they had been aware that the market prices had been artificially and falsely inflated by the defendants' false and misleading statements and concealments. At the time of the purchase of P-Com securities by Plaintiff and the other members of the Class, the fair market value of said common stock was substantially less than the prices paid by Plaintiff.

104. The price of P-Com's common stock declined materially upon the public disclosure of the facts that had been misrepresented or concealed as alleged in the Complaint. Plaintiff and other members of the Class have suffered substantial damages as a result.

105. Plaintiff incorporates by reference and realleges all paragraphs previously alleged herein, and asserts these claims against the Individual Defendants.

106. Individual Defendants Roberts, Antoniucci, Sophie, Bean, Wood, Cogan, and Hawkins are liable under Section 20(a) as control persons since, by virtue of their executive positions, their knowledge of and involvement in the Company's business, and/or stock ownership, and/or power and ability to make public statements on behalf of the Company to shareholders, potential investors and the media, they had the power and ability to control the actions of the Company.

107. By reason of such wrongful conduct, the Individual Defendants are liable pursuant to § 20(a) of the Exchange Act. As a direct result of the foregoing, Plaintiff and other members of the Class have suffered substantial damages in connection with their purchases of P-Com securities during the Class Period.

Plaintiff hereby demands a trial by jury.

WHEREFORE, Plaintiff, on his own behalf and on behalf of the Class, prays for judgment as follows:

(a) Declaring this action to be a class action pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure on behalf of the Class defined herein;

(b) Awarding Plaintiff and the members of the Class rescissory or compensatory damages in an amount which may be proven at trial, together with interest thereon;

(c) Awarding Plaintiff and the members of the Class prejudgment and post-judgment interest, as well as their reasonable attorneys' and experts' witness fees and other costs; and;

(d) Awarding such other and further relief as this Court may deem just and proper including any extraordinary equitable and/or injunctive relief as permitted by law or equity to attach, impound or otherwise restrict the defendants' assets to assure Plaintiff has an effective remedy.

Of Counsel:

Shannon P. Keniry, Esq.
Finkelstein, Thompson & Loughran
1055 Thomas Jefferson Street NW, #601
Washington, D.C. 20007
Telephone: (202) 337-8000

¹ "Individual Defendants" are defined in ¶ 21 infra.

² All share prices and share amounts have been adjusted for the 2-for-1 stock spilt announced in August 1997.