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Digital Lightwave Summary: According to the docket, dated September 28, 2000, the Eleventh Circuit Court of Appeals issued an Order dismissing the appeal with prejudice.
By the Order and Final Judgment, dated April 30, 1999, U.S. District Judge Susan C. Bucklew certified the action as a class action and approved the settlement. According to Digital Lightwave’s Form 10-Q For The Quarterly Period Ended June 30, 1999, the Company reported a settlement of $4.3 million in cash, to be paid to plaintiffs primarily by a claim on the Company's directors and officers liability insurance policy, and the issuance of up to 1.8 million shares of Common Stock. The Company recorded a one-time charge of $8.5 million during 1998 as a result of the settlement. A Notice of Appeal was filed by plaintiff Charles D. Chalmers on May 20, 1999.
The Complaint names Digital and certain of the Company's officers and directors as defendants, alleging that these parties violated Sections 10(b) and 20(a) of the Exchange Act, as well as SEC Rule 10b-5 promulgated thereunder, by originating a series of materially misleading statements and omissions concerning the Company's business prospects and valuation of inventory. Specifically, Plaintiff alleges that the Defendants knowingly or recklessly misrepresented the Company's financial status during the Class Period by wrongfully recognizing revenues from certain shipments to distributors. As a result of these wrongful recognitions of revenue, Plaintiff alleges that the Company overstated revenue for the second quarter of 1997 by at least $2.6 million, and by at least $6.9 million for the third quarter. As a consequence of these overstatements of revenue, Plaintiff alleges that the defendants misrepresented the growth and profitability for the Company at all times during the Class Period, thereby artificially inflating the share price at all relevant times. During the Class Period, Digital insiders sold tens of thousands of shares at these artificially inflated prices. On Jan. 23, 1998, Digital shocked the market by announcing that it would restate its previously reported revenues for the second and third quarters of 1997. Specifically, the release indicated that the second quarter revenues would be restated from $5.3 million to $2.7 million and that third quarter revenues would be restated from $8.3 million to $1.4 million, that the decision to restate the 1997 results of operations resulted from the "discovery of certain errors in the timing of revenue recognition and a review of related accounting policies and procedures." The Company also announced that after consideration of the uncertainty in various international markets, the company has instituted a policy of deferring recognition of revenues on sales to international distributors until the product is actually sold to its end user customer. The press release further indicated that the Company had established a committee of outside directors to "review" its accounting policies. The price of Digital stock plummeted in response to this announcement, dropping $6.625 per share to close at $4.50 per share. This drop represented a decline of 59 percent from the previously prevailing market price.
INDUSTRY CLASSIFICATION:
SIC Code: 3663
Sector: Technology
Industry: Communications Equipment
| COMPANY/ISSUER NAME: | Digital Lightwave |
| COMPANY/ISSUER TICKER: | DIGL |
| COMPANY WEBSITE: | http://www.lightwave.com/ |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Parnes v. Digital Lightwave | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT |
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: Digital Lightwave Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Consolidated Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 09/04/1998 | ||
| CIVIL DOCKET FOR CASE #: 98-CV-152 | |||
| Type: Docket | Date on the document: 10/20/1999 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 09/28/2000 | ||
| OTHER DOCUMENTS | |||
| Corrected Brief of the Securities and Exchange Commission as Amicus Curiae in Support of Appellant on the Issue Specified | |||
| Case Name and/or Number: Parnes v. Digital Lightwave, Inc., et al. | |||
| Type: Brief | Date on the document: 08/09/1999 | ||
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