Solectron Corporation is an electronics manufacturing company in the United States.

The original Complaint alleges 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 September 17, 2001 and September 26, 2002, thereby artificially inflating the price of Solectron securities. Throughout the Class Period, as alleged in the Complaint, Defendants issued numerous statements reporting artificially inflated financial results. The Complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (a) that the Company was carrying tens of millions of dollars of obsolete and unsaleable inventory in its Technology Solutions division which was required to be written down. As a result of the foregoing, Solectron's reported financial results were artificially inflated at all times during the Class Period; (b) as a result of the Company's failure to writedown its inventory in a timely manner, the financial statements published by the Company during the Class Period were not prepared in accordance with Generally Accepted Accounting Principles and were materially false and misleading; and (c) that it was materially false and misleading to characterize the Company's earnings during the Class Period, as "in line" with Company guidance, when had the Company properly accounted for its inventory it would have drastically missed its guidance. On September 26, 2002, after the market closed, Solectron issued a press release announcing its financial results for the fourth quarter of 2002 and fiscal year 2002. The Company also reported that it was booking a pre-tax charge of $97 million to reserve for inventory revaluation and write-off. Solectron attributed the bulk of the charge to "inventory risk assumed by Solectron's product-oriented Technology Solutions business unit ...." Following this announcement, and other revelations, shares of Solectron common stock fell from their previous close.

As summarized by the Company’s Form 10-Q for the quarterly period ended November 25, 2005, additional Complaints making similar allegations were subsequently filed in the same court, and pursuant to an order entered June 2, 2003, the Court appointed lead Counsel and Plaintiffs to represent the putative class in a single consolidated action. The Consolidated Amended Complaint, filed September 8, 2003, alleges an expanded class period of June 18, 2001 through September 26, 2002, and purports to add a claim for violation of Section 11 of the Securities Act of 1933, as amended, on behalf of a putative class of former shareholders of C-MAC Industries, Inc., who acquired Solectron stock pursuant to the October 19, 2001 Registration Statement filed in connection with Solectron’s acquisition of C-MAC Industries, Inc. In addition, while the initial Complaints focused on alleged inventory issues at the former Technology Solutions business unit, the Consolidated Amended Complaint adds allegations of inadequate disclosure and failure to properly account for excess and obsolete inventory at Solectron’s other business units. The Complaint seeks an unspecified amount of damages on behalf of the putative class. On February 13, 2004 the Court denied Defendants’ motion to dismiss the Complaint and on September 2, 2004 the Court signed an order provisionally certifying the Class. In August 2005, the parties reached an agreement in principal to settle the litigation on terms not material to Solectron, and the Court granted preliminary approval of the settlement on November 30, 2005. A settlement hearing was scheduled for March 1, 2006 to determine final approval of the settlement.

By the Notice of Pendency and Proposed Settlement of Class Action dated November 30, 2005, the settlement fund is in the amount of $15,000,000 in cash.

According to the Final Judgment and Order of Dismissal with Prejudice, entered on March 3, 2006, from U.S. District Judge Honorable Charles R. Breyer of the U.S. District Court of the Northern District of California, the settlement is approved.