Case Page

 

Case Status:    DISMISSED    
On or around 03/20/2001 (Other)

Filing Date: May 11, 1999

According to the Company’s FORM 10-Q For the Quarterly Period Ended March 2, 2001, Plaintiffs filed a notice of appeal on October 2, 2000. On February 14, 2001, plaintiffs filed a Stipulation of and Request for Dismissal agreeing to dismiss their appeal.

As reported by the same SEC filing, on May 11, 1999, a securities class action, captioned Gaylinn v. 3Com Corporation, et al., Civil Action No. C-99-2185 MMC (Gaylinn), was filed against 3Com and several of its present and former officers and directors in United States District Court for the Northern District of California. Several similar actions have been consolidated into the Gaylinn action. On September 10, 1999, the plaintiffs filed a consolidated complaint which alleges violations of the federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and seeks unspecified damages on behalf of a purported class of purchasers of 3Com common stock during the period from September 22, 1998 through March 2, 1999. In January 2000, the Court dismissed the complaint. In February 2000, plaintiffs filed an amended complaint. In June 2000, the Court dismissed the amended complaint without prejudice. Plaintiffs filed another amended complaint. On July 24, 2000, the Company filed a motion to dismiss the latest amended complaint. In September 2000, the Court dismissed the amended complaint with prejudice.

The original complaint charges 3Com and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. The complaint alleges that
beginning in 9/98, defendants made false and misleading statements about 3Com's
exceptionally strong and much better-than-expected 1stQ F99 EPS of $.24, strong
ongoing demand for 3Com's Systems Products (especially its new flagship
CoreBuilder 9000 switch) and 3Com's Client Access Products, 3Com's increased
operational efficiencies, improved channel inventory controls and cost savings
and the program 3Com was making with its new, improved business model.

The complaint further alleges that during 3Com's 1stQ F99 and 2ndQ F99,
3Com's insiders also used $130.4 million of 3Com's cash to repurchase 4.3
million 3Com shares on the open market, to help manipulate and artificially
inflate the stock to help the insiders sell their own shares at much higher
and, for them, more profitable prices. As a result of these positive
representations, 3Com's stock soared from as low as $23-1/8 on 9/1/98 to as
high as $51-1/8 on 12/23/98, its 98 and Class Period high, and during 11/98-
1/99, 3Com's top insiders sold 4.2 million shares of their 3Com stock at as
high as $48.69 per share for $189 million. In early 2/99, 3Com's stock fell
sharply, from $47-1/4 to $30-9/16 in seven trading sessions when rumors
circulated that Intel Corp. was gaining NIC market share from 3Com and two 3Com
distributors announced disappointing results. However, when 3Com assured
analysts that its business model was intact and it was on track to achieve 3rdQ
F99 and 4thQ F99 EPS consistent with its prior guidance, 3Com's stock
stabilized and recovered to as high as $35-9/16. However, on 3/2/99, 3Com
revealed that, due to weak sales of Systems Products, especially in North and
South America and very weak sales of Client Access Products, 3Com's 3rdQ F99
EPS, and its results going forward, would be much worse than earlier forecast,
causing analysts to slash the 3Com forecast for the 4thQ F99, F99 and F00 EPS
to just $.22-$.29, $1.04-$1.11 and $1.15-$1.55, respectively, far below the
levels forecast during the Class Period. 3Com's stock dropped from $30-11/16 on
3/1/99 to as low as $22-3/4 on 3/3/99, a 27% two-day decline on extraordinary
volume of over 92 million shares.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Networks
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: COMS
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: N.D. California
DOCKET #: 99-CV-02185
JUDGE: Hon. Maxine M. Chesney
DATE FILED: 05/11/1999
CLASS PERIOD START: 09/22/1998
CLASS PERIOD END: 03/02/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kirby McInerney & Squire LLP
    830 Third Avenue 10th Floor, Kirby McInerney & Squire LLP, NY 10022
    212.317.2300 ·
  2. Law Offices of Steven E. Cauley, P.A. (Little Rock)
    2200 Rodney Parham Road Suite 218, Law Offices of Steven E. Cauley, P.A. (Little Rock), AR 72212
    501.312.8500 ·
  3. Lowey, Dannenberg, Bemporad & Selinger, P.C.
    1 North Lexington Avenue, 11th Floor, Lowey, Dannenberg, Bemporad & Selinger, P.C., NY 10601-1714
    914.997.0500 914.997.0035 · ldbs@wesetnet.com
  4. 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
  5. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 99-CV-02185
JUDGE: Hon. Maxine M. Chesney
DATE FILED: 07/10/2000
CLASS PERIOD START: 09/22/1998
CLASS PERIOD END: 03/02/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Chitwood & Harley LLP (Atlanta)
    7945 East Paces Ferry Road, 1400 Resurgens Plaza, Chitwood & Harley LLP (Atlanta), GA 30326
    404.266.1650 · info@chitwoodlaw.com
  2. Holzer Holzer & Cannon, LLP
    1117 Perimeter Center West, Suite E-107 , Holzer Holzer & Cannon, LLP , GA 30338
    888.508.6832 · holzerlaw@aol.com
  3. Kirby McInerney & Squire LLP
    830 Third Avenue 10th Floor, Kirby McInerney & Squire LLP, NY 10022
    212.317.2300 ·
  4. Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA)
    100 Pine Street - Suite 2600, Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA), CA 94111
    415.288.4545 415.288.4534 ·
  5. 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
  6. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date