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Case Status:    DISMISSED    
On or around 03/05/1998 (Other)

Filing Date: October 07, 1996

According to the latest docket posted, on October 22, 1997, the plaintiffs filed an appeal to the U.S. Court of Appeals from the September 30, 1997 Opinion and Judgment which granted the defendants’ motion to dismiss the class action complaint. On March 5, 1998, the Court entered the certified copy of the order from the Sixth Circuit Court of Appeals. The plaintiffs voluntarily dismissed the appeal.

The case was dismissed with prejudice by the court on 9/30/97. Judge Gerald E. Rosen wrote that, "Nowhere in the Complaint do Plaintiffs specify each statement that is allegedly false nor do they give a particular reason why a particular statement is false. Rather, they have simply complied a long list of block quotes, many of which contain statements that cannot seriously be regarded as false or misleading, and they line these statements up against a conclusory list of omissions and pronounce that fraud exists," as one of the reasons for the dimissal.

The complaint charges defendants with violations of the federal securities laws. Network Express went public in mid-1994, and in early 1994 its stock was trading at approximately $7-$8 per share due to the apparent success Network Express had achieved in selling its ISDN products in Japan. During 1995, defendants made false and misleading representations that Network Express' business in Japan would continue to succeed and that Network Express was on the verge of explosive growth in revenues from its business in the United States and Europe, in large part due to the success of its new NELink 1000 product, while forecasting strong revenue and earnings per share growth for Network Express throughout 1995 and 1996. These representations pushed Network Express' stock price to much higher levels -- $19-5/8 per share by August 1995 -- enabling Network Express and its insiders to sell over 3 million shares of Network Express stock to the public at artificially inflated prices. This enabled the Company to raise $27 million it desperately needed in an attempt to continue to survive in an increasingly competitive business environment and Network Express' insiders to pocket over $3.8 million in insider trading proceeds. However, shortly after defendants had completed their large stock sales, Network Express reported lower than expected third quarter results and revealed that instead of the strong growth it had previously forecast, its sales in Japan would decline sharply, its United States business would not achieve strong revenue growth and that its NELink 1000 product did not have the remote access capabilities, which were indispensable for its commercial success.

COMPANY INFORMATION:

Sector: Services
Industry: Personal Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: NETK
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Michigan
DOCKET #: 96-CV-74627
JUDGE: Hon. Gerald E. Rosen
DATE FILED: 10/07/1996
CLASS PERIOD START: 03/13/1995
CLASS PERIOD END: 10/06/1995
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Alfred G. Yates, Jr.
    429 Forbes Avenue, Alfred G. Yates, Jr. , PA 15219
    412.391.5164 ·
  2. Bransdorfer & Bransdofer, P.C.
    125 Ottawa Avenue, N.W., Suite 305, Ledyard Building, Bransdorfer & Bransdofer, P.C., MI 49503
    616.458.4004 ·
  3. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  4. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
No Document Title Filing Date