The original action charges Metawave Communications Corporation (Metawave'), as well as Metawave's chief executive officer and chief financial officer, with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The violations, as the complaint alleges, stem from the issuance of allegedly false and misleading financial statements and financial projections during the Class Period, which had the effect -- during the class period -- of artificially-inflating the price of Metawave's shares. The lawsuit seeks to recover losses suffered by individual and institutional investors who purchased Metawave's shares during the Class Period, excluding defendants and their affiliates. After disclosure that Metawave's current financial results would not be as expected, and that previously-reported financial results would be even lower than reported, Metawave's shares swiftly lost more than 70% of their value.
NOTE: In February 2003, Metawave filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code.
In August 2002, the Court entered Order consolidating the action and appointing lead plaintiffs and co-lead counsel. On October 15, 2002, the plaintiffs filed a Consolidated Class Action Complaint and the defendants responded by filing motions to dismiss the complaint. On February 2, 2003, defendant Metawave filed a notice of bankruptcy and the case was stayed as to defendant Metawave. On June 20, 2003, the Court entered the Order granting the defendants' motions to dismiss the Consolidated Class Action Complaint. On August 15, 2003, the plaintiffs filed an Amended Consolidated Class Action Complaint and later filed a Second Amended Consolidated Class Action Complaint on February 25, 2004. The defendants filed a motion to dismiss the Second Amended Consolidated Complaint, but the plaintiffs again amended their complaint by filing a Third Amended Consolidated Class Action Complaint on September 12, 2005.
On March 25, 2009, Judge Ricardo S. Martinez granted defendants Hunsberger and Fuhlendorf's motion to dismiss. The Court grants defendants' motion to dismiss the Third Amended Complaint and dismisses with prejudice the claims against these two defendants. On April 8, 2009, the plaintiffs filed a motion for reconsideration of the March 25th Order. On October 29, 2009, the parties filed a Stipulation of Settlement and the plaintiffs filed a motion for preliminarily approval of the class action settlement. The proposed settlement is in the amount of $1.5 million in cash. On November 10, 2009, Judge Martinez preliminarily approved the settlement. On February 11, 2010, Judge Martinez signed the Order approving the final settlement and the plan of allocation and awarded attorneys' fees and expenses. The action was dismissed with prejudice. On February 22, 2010, Judge Martinez signed an amended order awarding attorneys’ fees and expenses.