The complaint charged California Amplifier and certain of its officers and directors with violations of the federal securities laws. The complaint alleged that during the Class Period, defendants artificially inflated California Amplifier stock by making false representations that California Amplifier was effectively competing in a rapidly growing industry, was enjoying very strong demand for its products, especially its international products, had successfully introduced its basic MultiCipher(TM) product which was enjoying strong sales (including a major sale in Thailand that would result in millions of dollars of follow-on business), was successfully developing its MultiCipher Plus(TM) product for introduction during Fiscal 1997, and expected large orders from wireless cable systems in Australia and Saudi Arabia -- all of which would result in California Amplifier achieving substantial sequential gross profit margin, revenue and earnings per share growth throughout Fiscal 1997 and Fiscal 1998, to end March 1, 1997 and February 28, 1998. However, after reporting slightly declining sales, net income and EPS in mid-June 1996, in early August 1996, California Amplifier shocked the market by admitting that it was suffering losses due to weakening demand and poor sales, long delays in receiving orders from Australia and Saudi Arabia, delays in introducing its updated MultiCipher Plus scrambling product and no follow-on orders for MultiCipher from Thailand.
According to the docket, on November the 23, 1999, the Court entered the Mandate of the Ninth Circuit Court of Appeals which affirmed the decision of the District Court. The plaintiff earlier filed the appeal on October 19, 1998, after the Court issued an Order and subsequent Judgment and Order in favor of the defendants and terminated the case.