According to a Press Release dated December 26, 2001, the complaint alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On or about November 15, 2000, Novatel commenced an initial public offering of 7,000,000 of its shares of common stock at an offering price of $8 per share (the "IPO"). In connection with the IPO, Novatel filed a registration statement, which incorporated a prospectus (the "Prospectus"), with the SEC. The complaint further alleges that the Prospectus was materially false and misleading because it failed to disclose, among other things, that: (i) the Underwriter Defendants had solicited and received excessive and undisclosed commissions from certain investors in exchange for which the Underwriter Defendants allocated to those investors material portions of the restricted number of Novatel shares issued in connection with the IPO; and (ii) the Underwriter Defendants had entered into agreements with customers whereby the Underwriter Defendants agreed to allocate Novatel shares to those customers in the IPO in exchange for which the customers agreed to purchase additional Novatel shares in the aftermarket at pre-determined prices.
On August 28, 2002, the case was voluntarily dismissed.