According to the docket, on February 19, 2002, the Court entered the Order signed by U.S. District Judge Barbara S. Jones. According to the Order, on January 3, 2002, the Court entered an order dismissing without prejudice the Consolidated Amended Complaint and granting Plaintiffs twenty days to replead. As Plaintiffs have not replead, the Consolidated Amended Complaint is dismissed with prejudice. On March 28, 2002, the Court entered the Judgment and the case was closed.
On October 27, 2000, the Court entered the Stipulation and Order consolidating several actions into a single, consolidated complaint captioned In re Teleglobe Inc. Securities Litigation, 00 civ. 5610. On November 21, 2000, the Court entered the Order appointing plaintiffs Joe D. Stewart and Barbara Murray as Lead Plaintiffs for the Class and appointing the law firms Milberg Weiss Bershad Hynes & Lerach LLP and Cauley & Geller Lead Counsel. On February 9, 2001, the plaintiffs filed a Consolidated Amended Class Action Complaint, and the defendants responded by filing a motion to dismiss the Consolidated Amended Complaint.
The original Complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between February 11, 1999 and July 29, 1999, thereby artificially inflating the price of Teleglobe common stock. The complaint alleges that during the Class Period, Teleglobe's profitability was plummeting as a result of back office problems in its newly-acquired Excel division, a severe price war in the North American
wholesale long distance market, shrinking profit margins in nearly all of its
business lines and adverse fluctuations in certain currency markets.
Nevertheless, as alleged in the complaint, throughout the Class Period,
defendants falsely represented that these problems were merely isolated events in order to permit Teleglobe to complete a huge $1 billion bond offering on July 20, 1999, which was necessary for Teleglobe to raise the capital it needed to finance its $5 billion global telephone network called GlobeSystem, which would facilitate Teleglobe's transition from a provider of slow growing/low margin telephone services to a provider of fast growing/higher margin data services. However, as alleged in the complaint, just eight days after Teleglobe sold $1 billion worth of bonds to unsuspecting investors, it announced that it would badly miss analysts' earnings estimates for the second quarter in a row. Upon this announcement, the price of Teleglobe common stock collapsed in value from $27 13/16 per share to $21 11/16 per share on huge trading volume which was many times more than Teleglobe's average daily trading volume.