Pinnacle Systems, Inc. Conclusion: According the latest docket posted, on November 19, 2002, the Court entered the Order signed by U.S. District Judge Maxine M. Chesney granting the motion to dismiss Third Amended Complaint with prejudice. That day, the Court also entered Judgment, and the case was dismissed with prejudice.
As summarized by the Company’s FORM 10-Q for the quarterly period ended September 30, 2002, in July 2000, a lawsuit entitled Jiminez v. Pinnacle Systems, Inc. et al., No. 00-CV-2596 was filed in the United States District Court for the Northern District of California against the Company and certain of its officers and directors. Additional actions based on the same allegations were filed in the same Court. In October 2000, all of the actions were consolidated under the name In re Pinnacle Systems, Inc. Securities Litigation, Master File No. C-00-2596-MMC, and lead plaintiffs and lead counsel were appointed. The consolidated action is a putative class action alleging that defendants violated the federal securities laws by making false and misleading statements concerning the Company’s business during a putative class period of April 18, 2000 through July 10, 2000. Plaintiffs seek unspecified damages. Plaintiffs filed a consolidated amended complaint in December 2000, and defendants thereafter moved to dismiss that complaint. In a written order dated May 7, 2001, the Court dismissed the consolidated amended complaint and permitted plaintiffs to file an amended complaint. Plaintiffs filed a second amended complaint in June 2001. Defendants thereafter moved to dismiss that complaint. In a written order dated January 25, 2002, the Court dismissed the second amended complaint and granted plaintiffs leave to amend. On March 22, 2002, plaintiffs filed a third consolidated amended complaint. Defendants’ motions to dismiss plaintiffs’ third consolidated amended complaint is currently scheduled to be heard on November 15, 2002.
The original complaint alleges that defendants' false and misleading statements concerning the revenues to be derived from its streaming media products, which would result in 4thQ and Fiscal 2000 (to end 6/30/00) EPS of $.17 and $.58, artificially inflated the price of Pinnacle stock to a Class Period high of $30-5/8. This upsurge in Pinnacle's stock caused by defendants' false and misleading statements allowed the insiders to sell 78,000 shares of their Pinnacle stock for proceeds of $2.1 million and enabled Pinnacle to complete the $24 million acquisition of the Avid Sports business. On 7/11/00, shortly after the acquisition was completed on 6/30/00, Pinnacle revealed that it was in fact suffering a huge drop in revenues and exposed the problems Pinnacle had been experiencing during the Class Period in successfully selling its products. This announcement caused its stock price to drop to as low as $8-13/16 on record volume of 23.7 million shares on 7/11/00 causing hundreds of millions of dollars in damages to members of the Class.
SIC Code: 3577
Industry: Computer Hardware
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