According to a press release dated April 1, 2005, the United States Court of Appeals for the Second Circuit upheld the dismissal of a proposed class action securities fraud complaint against Corning Incorporated and several of its officers. In a decision dated March 30, 2005, the Court of Appeals held that Judge Charles J. Siragusa of the United States District Court for the Western District of New York was correct in dismissing all claims of wrongdoing by Corning and its executives. Noting that plaintiffs had not provided any support to prove that Corning was aware that its business would slow, the Court affirmed Judge Siragusa's ruling that Corning was not required to be clairvoyant, and that Corning's expressions of hope regarding future earnings were tempered by sufficient warnings of risks.
On April 9, 2004, the Court dismissed the complaint in full. Plaintiffs filed a notice of appeal in the District Court for the Western District of New York on May 7, 2004. No decision on the appeal has been issued.
According to a Press Release dated December 7, 2001, the Complaint alleges that defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 by issuing a materially false and misleading Registration Statement and Prospectus (collectively, the "Prospectus") in connection with Corning's offering of common stock and debentures in November 2000 (the "Offering"). Specifically, the complaint alleges that the Prospectus was materially false and misleading, among other reasons, because it stated that demand for the Company's products was robust, because it omitted to disclose that the Company was amassing hundreds of millions of dollars of obsolete inventory that would have to be written-off, and because, given the foregoing, the projection of 25% earnings growth in 2001, contained in the Prospectus, was lacking in a reasonable basis at all times. On July 10, 2001, the Company announced it was taking a $5.1 billion charge primarily related to two recent acquisitions, that it would also write-off $300 million in excess and obsolete inventory, and that it would cut 1,000 jobs and close three plants. On July 25, 2001, the Company reported a massive second-quarter loss of $4.76 billion, or $5.13 per share. Corning's shares closed that day at$13.77, down 80% from the Offering price.