According to the docket, on January 22, 2001, U.S. District Judge Reginald C. Lindsay issued a Memorandum and Order granting the defendants' motion to dismiss the consolidated amended class action complaint. The day, the Court entered the Judgment of Dismissal and the case was closed.
The original complaint charges that defendants Galileo and certain of its officers and directors violated Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934 by materially misleading Galileo shareholders through the omission of material facts and dissemination of materially false and misleading information throughout the Class Period. As alleged in the Complaint, the defendants conspired to conceal material adverse information regarding ongoing negotiations with the U.S. Department of Defense which sought to restrict the export of certain of the Company's products. Furthermore, the lawsuit charges that, during the Class Period, Galileo improperly failed to write-down certain receivables and assets, and improperly continued to book large sales to customers it knew or should have known would not be able to pay. On July 24, 1998, Galileo shocked the market when it revealed that the Company would report a loss in its 1998 third quarter. In substantial part, this loss related to a charge being taken as a result of the Company's previous failure to write-down assets and the improper recording of revenues, as well as its inability to export certain products as directed by the U.S. Department of Defense. The market reacted swiftly as shares in Galileo's stock plummeted 64% to close at $3 on July 24, 1998, as compared with the previous day's close of $8.25 -- a single day loss of over $42 million in market capitalization. Plaintiff seeks to recover damages on behalf of class members.