According to a Dow Jones News Service article dated November 10, 2003, Extreme Networks Inc. (EXTR) has agreed to a proposed settlement of a securities fraud class-action lawsuit concerning the company's initial public offering. Under the terms of the deal, the plaintiffs will dismiss and release all claims against Extreme in exchange for a payment by the companies that insured Extreme's IPO in April 1999, according to the SEC filing. Extreme also agreed to surrender the control of certain claims it may have against the underwriters of its IPO, including Morgan Stanley & Co. (MWD), BancBoston Robertson Stephens Inc. and Lehman Brothers Inc. (LEH) - all of which were named as defendants in the lawsuit.

Extreme won't have to make a cash payment to the plaintiffs unless the amount paid by the insurers in the settlement exceeds the amount of the insurance coverage, according to the filing. The amount to be paid to the plaintiffs by the insurance companies wasn't disclosed.

According to a Press Release dated July 6, 2001 Milberg Weiss announced a class action suit against Extreme Networks Inc. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the defendants allocated to those investors material portions of the restricted number of Extreme Networks shares issued in connection with the Extreme Networks IPO; and (ii) the defendants had entered into agreements with customers whereby the defendants agreed to allocate Extreme Networks shares to those customers in the Extreme Networks IPO in exchange for which the customers agreed to purchase additional Extreme Networks shares in the aftermarket at pre-determined prices.