NVE Corporation - Securities Class Action

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Copyright (c) 2001
Stanford Law School

NVE Corporation Conclusion: On Friday, May 30, 2008, U.S. Court of Appeals for the Eighth Circuit affirmed the dismissal of a shareholder class action accusing nanotechnology company NVE Corp. of misrepresenting its intellectual property in a scheme to defraud investors. The court ruled that the plaintiffs’ complaint did not satisfy the pleading requirements for falsity, scienter and materiality under PSLRA. The court also denied the shareholders' claims that the district court erred in denying their request to amend their complaint since the deadline for seeking leave to amend had not passed. The lower court did not allow the amendment on the basis of futility. Circuit Judge Diana E. Murphy stated in her opinion, “Although Federal Rule of Civil Procedure 15(a) provides that leave to amend should be freely granted 'when justice so requires,' appellants have not articulated any changes they wish to make, much less demonstrated how revision would address the numerous pleading deficiencies identified by the district court.”

On August 1, 2007, the plaintiffs filed a Notice of Appeal to the Eighth Circuit Court of Appeals.

According to a press release dated July 5, 2007, NVE Corp., which makes sensors used in aerospace and automotive applications, said Thursday a Minnesota district court dismissed a consolidated class action lawsuit against the company. The complaint against NVE and certain individuals claimed NVE issued press releases with materially false and misleading statements pertaining to its computer memory technology starting on May 22, 2003. NVE licensed its MRAM technology to other companies, including Cypress Semiconductor Corp. "The court order to dismiss supports our long-standing position that the lawsuits were wholly without merit," Baker said in a statement.

On July 19, 2006, the Court entered the Order granting the motion to consolidate the cases and approve lead plaintiffs and lead plaintiffs’ selection of lead counsel. On September 18, 2006, the plaintiffs filed an Amended Consolidated Class Action Complaint, and the defendants responded by filing a motion to dismiss the Amended Consolidated Class Action Complaint. On December 26, 2006, the defendants filed an amended motion to dismiss.

The original Complaint charges defendants, NVE Corporation and certain officers and directors, with violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Specifically, the complaint alleges that during the Class Period, NVE issued a string of press releases related to Magnetic Random Access Memories (“MRAM”), which was touted as having the potential of combining the speed of semiconductor memory with the nonvolatility of magnetic disk drives -- and thus could eventually replace conventional memories. NVE primarily licensed its intellectual property (the patents it held on MRAM technology) to other companies (most notably, Cypress Semiconductor Corp.) for the development of products. NVE would then purportedly receive royalties from the licenses for, as well as revenues from its sales of, these products. However, on February 14, 2005, Cypress Semiconductor announced that the development of anything other than a small niche market for MRAM technology was not economically feasible.

The complaint further alleges that on this news, the price of the Company’s common stock began to decline from a February 11, 2005 closing price of $28.36 to a closing price of $17.04 on April 19, 2005, when the Company finally issued a press release commenting on the Cypress Semiconductor announcement. The Company’s stock price has yet to return to the February 14, 2005 price of $25.32 per share and has been trading lately at around $17.00 per share.

INDUSTRY CLASSIFICATION:
SIC Code: 3674
Sector: Technology
Industry: Semiconductors

COMPANY/ISSUER NAME:	NVE Corporation
COMPANY/ISSUER TICKER:	NVEC
COMPANY WEBSITE:	http://www.nve.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Carole Kops, et al. v. NVE Corporation, et al.

COURT: D. Minnesota	DOCKET NUMBER: 06-CV-00574
JUDGE NAME: Hon. Michael J. Davis
DATE FILED: 2/10/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 5/22/2003	CLASS PERIOD END: 2/11/2005
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Brodsky & Smith, LLC 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004 (voice) 610.668.7987., (fax) 610.660.0450, esmith@Brodsky-Smith.com Federman & Sherwood 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 58 South Service Road, Suite 200, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Seeger Weiss LLP (New York) One William Street, New York, NY, 10004 (voice) 212.584.0700, (fax) , info@seegerweiss.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 6

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint - Demand for Jury Trial
Type: Complaint		Date on the document: 02/10/2006

REFERENCE COMPLAINT

In Re: NVE Corporation Securities Litigation

COURT: D. Minnesota	DOCKET NUMBER: 06-CV-00574
JUDGE NAME: Hon. Michael J. Davis
DATE FILED: 9/18/2006	SOURCE: Docket
CLASS PERIOD START: 5/16/2003	CLASS PERIOD END: 4/19/2005
TYPE OF COMPLAINT: Consolidated and/or Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Federman & Sherwood 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Amended Consolidated Class Action Complaint
Type: Docket		Date on the document: 09/18/2006
Judgment in a Civil Case
Type: Other		Date on the document: 07/03/2007
Memorandum of Law & Order
Type: Order		Date on the document: 07/03/2007
Judgment
Type: Order		Date on the document: 5/30/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 05/30/2008

OTHER DOCUMENTS
Complaint For Violation Of The Federal Securities Laws
Case Name and/or Number: Mark Boardman, et al. v. NVE Corporation, et al.
Type: Complaint		Date on the document: 03/06/2006

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