The original complaint was filed alleging 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 14, 2000 and October 17, 2000, thereby artificially inflating the price of Teradyne common stock. The complaint alleges that Teradyne was experiencing declining orders in its semiconductors testing systems division, which would cause the Company's growth rate to slow from historical levels. Defendants concealed this adverse fact from investors, so that the Company could complete the acquisition of Herco Technology Corporation and Perception Laminates, Inc., d/b/a/ Synthane Taylor, using artificially inflated Teradyne common stock as currency. When the truth about Teradyne's business was revealed to the public, the price of Teradyne common stock dropped precipitously, causing plaintiff and the members of the Class to suffer substantial damages.
According to the Company’s FORM 10-Q for the quarterly period ended October 3, 2004, Teradyne and two of its executive officers were named as defendants in three purported class action complaints that were filed in Federal District Court, Boston, Massachusetts, in October and November 2001. The court consolidated the cases and has appointed three lead plaintiffs. On November 8, 2002, plaintiffs filed and served a consolidated amended class action complaint. The complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by making, during the period from July 14, 2000 until October 17, 2000, material misrepresentations and omissions to the investing public regarding our business operations and future prospects. The complaint seeks unspecified damages, including compensatory damages and recovery of reasonable attorneys’ fees and costs. The Company filed a motion to dismiss all claims asserted in the complaint on February 7, 2003. On January 16, 2004, the U.S. Magistrate Judge recommended to the U.S. District Court that the Company’s motion to dismiss the consolidated amended class action complaint in its entirety be allowed without prejudice. On February 2, 2004, the lead plaintiffs filed an objection to the U.S. Magistrate Judge’s recommendation. The Company filed its response to the lead plaintiff’s objection. On September 8, 2004, the U.S. District Court adopted the U.S. Magistrate Judge’s recommendation and dismissed the consolidated amended class action complaint in its entirety without prejudice.