Silicon Image, Inc. Conclusion: According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2004, Silicon Image and certain of its officers have been named as defendants in consolidated securities class action litigation captioned “In re Silicon Image, Inc. Securities Litigation, No. C-03-5579 JW PVT”, commenced on December 11, 2003 and pending in the United States District Court for the Northern District of California. Plaintiffs filed the action on behalf of a putative class of shareholders who purchased Silicon Image stock between April 15, 2002 and November 15, 2003. The lawsuit alleges that Silicon Image had materially overstated its licensing revenue, net income and financial results during this time period, and that Silicon Image was being forced to restate its financial results. Following the announcement by the Audit Committee of Silicon Image’s Board of Directors that it has completed its examination and that it has concluded that no changes to Silicon Image’s previously announced financial results are required, the plaintiffs dismissed the lawsuit.
The original complaint alleges that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period thereby artificially inflating the price of Silicon securities.
Specifically, the complaint alleges that Defendants made a series of false and misleading statements starting on April 15, 2002. The Complaint alleges that the press releases issued on April 15, 2002, June 13, 2002, July 23, 2002, October 15, 2002, January 15, 2003, April 15, 2003, July 22, 2003, September 30, 2003 and October 19, 2003 were materially false and misleading. In additions, the Complaint alleges that the Company's Form 10-Q's and Form 10-K filed with the Securities and Exchange Commission ("SEC") on May 12, 2002, July 30, 2002, November 8, 2002, March 27, 2003, May 8, 2003, and August 14, 2003 were materially false and misleading. The Complaint alleges that each of these above referenced press releases and SEC filings were materially false and misleading because, during the Class Period defendants, had overstated Silicon's license revenue by improperly recognizing revenue that did not satisfy revenue recognition criteria. The Complaint also alleges that, as a result of the improper revenue recognition, the Company's net income and earnings were overstated and its financial statements were prepared in violation of General Accepted Accounting Principles ("GAAP"). In addition, the Complaint alleges that while in possession of material non public information that defendants Lee, Gargus and Tirado sold thousands of shares of their personally held Silicon stock. On November 14, 2003, Silicon announced that its Form 10-Q for the quarter ended September 30, 2003 would not be timely filed because an investigation into the Company revenue recognition practices associated with its licensing transaction. On this news, Silicon's shares fell more than 27.7% to close at $6.40.
SIC Code: 3670
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