According to the docket, on April 2, 2003, the Court entered the Orders by U.S. District Judge Arlander Key granting the parties’ joint motion for preliminary approval of the settlement agreement and certifying the settlement class for the settlement of the securities class action and shareholder derivative action. The fairness hearing was set for June 18, 2003. On June 18, 2003, the settlement was approved. Pursuant to the Order and Final Judgment entered on June 18, 2003, and pursuant to Stipulation and Final Approval of Class Action Settlement, the case was dismissed on the merits with prejudice and without costs to any party.

In a news article dated February 24, 2003, Westell Technologies, Inc. announced on February 20, 2003, an agreement to settle the consolidated securities class action lawsuit In re Westell Technologies, Inc. Securities Litigation (No. 00C6735) filed against the Company and certain executive officers and directors of the Company in the United States District Court for the Northern District of Illinois. In addition, Westell announced an agreement to settle the related consolidated derivative action Dollens and Vukovich v. Zionts, et al. (No. 01C2826), filed in the United States District Court for the Northern District of Illinois. The actions generally alleged that the defendants violated the antifraud provisions of the federal securities laws or state common laws by making false and misleading statements in 2000 regarding forecasts for the second quarter of Westell's fiscal 2001. Under the terms of the settlement agreement, all claims will be dismissed without any admission of liability or wrongdoing by any defendant.

Further, under the terms of the settlement, Westell's and its directors' and officers' liability insurers will pay a total of $3.95 million to the plaintiffs and their counsel. Westell does not expect to pay anything in connection with the settlement. The shareholder class will receive $3.35 million out of which the Court will be asked to award attorneys' fees and expenses to class counsel. Counsel to plaintiffs in the derivative action will receive the remaining $600,000 to settle the derivative claim. Beyond the financial settlement, Westell agreed to adopt certain corporate governance and communications procedures. The agreement is subject court approval.The parties expect that the Court will first consider the settlement at a preliminary approval hearing that they anticipate will occur in March 2003.

On January 10, 2001, the plaintiffs’ motion for consolidation was granted, and the Court appointed lead plaintiff and lead counsel. On February 1, 2001, the plaintiffs filed a consolidated amended class action complaint, and, that same day, the defendants responded by filing a motion to dismiss the plaintiff's consolidated complaint. On October 30, 2001, the Court entered the Minute Order by U.S. District Judge Joan Humphrey Lefkow granting in part and denying in part the motion to dismiss.

The original complaint alleged that Westell and certain of its officers and directors violated federal securities laws by making a series of materially false and misleading statements. Specifically, shareholders asserted that Westell misrepresented the level of demand for its products from SBC Communications when they knew since June of 2000 that SBC would be purchasing significantly fewer modems from the Company. In addition, certain officers and directors sold over $11 million of Westell shares in alleged illegal insider trades at peak prices near $30 per share, just before an analyst began reporting that the customer would be scaling back its modem purchases. As a result of these false and misleading statements, the complaint charges, Westell's stock price was artificially inflated throughout the Class Period, causing plaintiffs and the other members of the Class to suffer damages.