Bay Networks, Inc. Summary: According to the docket posted on the site, the court granted defendants' motion to dismiss both of the third amended complaints, writing that "while both TACs do supply more information than the prior pleadings, the barriers defined by the PSLRA and SGI are higher; that was the intent of Congress and the interpretation of the Ninth Circuit; because this is the fourth complaint in this case, and because plaintiffs have been unable to meet the high pleading standards, the dismissal are now with prejudice." On September 11, 2000, plaintiffs appealed the decision to the appellant court. On August 29, 2001, the Circuit Court of Appelas affirmed the decision of the District Court, upholding the dismissal of the case.
According to the closing Order from U.S. District Judge Charles A. Legge of the United States District Court For The Northern District Of California, the Defendants's motion to dismiss was granted; complaints were dismissed with prejudice. The complaint did not state sustainable claim under securities law; statutory particularity and strong inference requirements were not met to show deliberate recklessness or conscious effort to commit fraud.
The original complaint alleges defendants engaged in a fraudulent scheme and course of business that operated as a fraud and deceit on all persons who purchased or otherwise acquired Bay Networks stock. Defendants' materially false and misleading statements were made in or disseminated from California to the general public. As set forth hereafter, these materially false and misleading statements included statements regarding: (1) Bay's management and organization, including their capabilities and accomplishments; (2) Bay's sales, revenues profits; (2) Bay's products and product development; (3) Bay's competitive market position, and (4) otherwise about Bay's business. These materially false or misleading statements enabled Bay Networks to Complete stock-for-stock acquisitions during the Class Period, and enabled many of the individual defendants to each sell tens of thousands of shares of Bay common stock thereby reaping proceeds of more than $37 million by trading on undisclosed inside information. As a result of the defendants' violations of law the market price of Bay stock during the Class Period was as high as $49.00 per share. Following Defendants' revelations beginning on Oct. 14, 1996, the price of Bay stock fell to as low as $18 5/8 per share.
SIC Code: 3661
Industry: Computer Peripherals
WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.
Go to Search page | Go to Case Index page | Back to Top