According to the docket, on September 24, 2003, the Court entered the Preliminary Order certifying the class action and the Settlement Fairness Hearing on January 16, 2004. The hearing was held, and on January 21, 2004, the Court entered the Order and Final Judgment by U.S. District Judge Gary L. Lancaster granting the motion for Final Approval of the Class Action Settlement and granting the motion for an Award of Attorneys’ Fees and Reimbursement of Expenses. Plaintiffs' Counsel was awarded attorneys' fees in the amount of 33-1/3% of the net Settlement Fund, and $191,787.98 in reimbursement of expenses from the Settlement. The case is closed.
By the Notice of Proposed Settlement dated October 31, 2003, a settlement for $7.1 million has been proposed and submitted to the class of plaintiffs.
The original complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for falsely reassuring investors during the class period that its revenues would rise this year, claiming that its geographic and business mix left it relatively immune from the economic downturn, and that it saw no need to change its guidance. The complaint further alleges that as a result of defendants' conduct, plaintiff and other members of the Class suffered damages.
Specifically, the complaint alleges that on April 11, 2001, in reaction to analysts' concerns about the impact the economic downturn was having on the Company's industry, Defendants falsely assured the investing community that Marconi did not need to change its earning guidance because ``the end demand is still there.'' However, less than three months later, on July 4, 2001, Marconi belatedly issued a profit warning, finally disclosing that tougher trading conditions in the three months to June meant that sales for the year would be 15 percent lower than last year. In addition, operating profit would be down by 50 percent for the year ending March 2002. The disclosure of Marconi's true financial condition was devastating to shareholders. Marconi ADR's, which hit a class period high of $12.50 on May 2, 2001, and had closed at $7.03 on July 3, 2001, dropped by over fifty percent when trading resumed, and closed on July 5, 2001 at only $3.35 per share.
