According to the docket posted, on April 10, 2002, the plaintiffs filed an assented motion to dismiss the action with prejudice. On April 12, 2002, the Court entered the Order signed by U.S. District Judge Douglas P. Woodlock dismissing both cases, 1:01-cv-11185 and related case 1:01-cv-11243, with prejudice. The Plaintiff could not find a lead plaintiff to represent the class. The case was closed.
The 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 July 20, 2000 and January 11, 2001. Specifically, as alleged in the complaint, the Company improperly recognized revenues during its second and third quarters of 2000 in order to meet revenue and earnings expectations during the Class Period, on products which were shipped to distributors months ahead of schedule and product-orders which had been canceled by distributors. On January 11, 2001, Sipex issued a press release announcing that its revenues for the fourth quarter of 2000 would be much worse than prior guidance, due to order cancellations and returns of products it already shipped and an inability to meet supposedly high-demand for products that it was unable to deliver to customers because of production problems. In response to this announcement, Sipex's stock price dropped by 46.3% in one day, from $24.2344 per share on January 11, 2001, to $13 per share by the close of trading on January 12, 2001. Prior to the disclosure of the true facts about Sipex's business, Sipex insiders sold a total of over $35 million of their personally-held Sipex stock.