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Leap Wireless International, Inc. Summary: According to a law frim press release dated November 29, 2007 a class action has been commenced on behalf of purchasers of Leap Wireless International, Inc. common stock.
The complaint charges Leap and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Leap is a wireless communications carrier that offers digital wireless service under the Cricket Communications, Inc. and Jump Mobile brands in the United States.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business, prospects and financial results. As a result of defendants’ false statements, Leap stock traded at artificially inflated prices during the Class Period, reaching its all-time high of $98.33 per share in July 2007.
On August 7, 2007, Leap announced disastrous second quarter 2007 results, including missing its revenue projections, soaring expenses and a high customer turnover rate, causing its stock to decline from $80.36 per share on August 7, 2007 to $60.00 per on August 8, 2007 – a one-day decline of 25%. Then, on November 9, 2007, before the market opened, defendants disclosed that Leap would be required to restate its financial statements for fiscal years 2004, 2005, 2006 and for the first and second quarters of fiscal year 2007 to correct for errors in its previously reported service revenues, equipment revenues and operating expenses, causing its stock to drop $21.38 per share.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company’s financial statements were materially misstated due to its failure to properly account for its service revenue in violation of Generally Accepted Accounting Principles (“GAAP”); (b) the Company’s financial statements were materially misstated due to its failure to properly account for its equipment revenue and cost of equipment in violation of GAAP; (c) the Company lacked requisite internal controls, and, as a result, the Company’s projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; and (d) given the Company’s exposure to subprime consumers and the intense competition in the low-cost cell carriers market Leap was facing, the Company had no reasonable basis to make projections about its ability to maintain its customer turnover rate and net customer additions. As a result, the Company’s projections issued during the Class Period were at a minimum reckless.
INDUSTRY CLASSIFICATION:
SIC Code: 4812
Sector: Services
Industry: Communications Services
| COMPANY/ISSUER NAME: | Leap Wireless International, Inc. |
| COMPANY/ISSUER TICKER: | LEAP |
| COMPANY WEBSITE: | www.leapwireless.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| HCL Partners Limited Partnership, et al. v. Leap Wireless International, Inc. , et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 11/29/2007 | ||
| OTHER DOCUMENTS | |||
| Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial | |||
| Case Name and/or Number: Frank Charek, et al. v. Leap Wireless International, Inc. , et al. | |||
| Type: Complaint | Date on the document: 11/29/2007 | ||
| Class Action Complaint - Jury Trial Demanded | |||
| Case Name and/or Number: Devay Campbell, et al. v. Leap Wireless International, Inc. , et al. | |||
| Type: Complaint | Date on the document: 12/07/2007 | ||
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