Class-Action Suits Target BigBand After Q3 Miss
Equipment Maker Faces At Least Three Lawsuits, Alleging the Company Misled Shareholders
By Todd Spangler -- Multichannel News, 10/5/2007 5:16:00 AM MT
At least three class-action lawsuits were filed this week against BigBand Networks, alleging that the company misrepresented its financial prospects to shareholders with its initial public offering in March.
BigBand last week warned that third-quarter revenues would be between $35 million to $39 million – as much as 40% lower than previous expectations. The lawsuits, filed with the U.S. District Court for the Northern District of California, allege BigBand violated federal securities laws by issuing misrepresentations about its operations and prospects to inflate the stock price.
In a statement about the actions, BigBand vice president and general counsel Rob Horton said: “BigBand Networks intends to vigorously defend against certain shareholder class-action lawsuits filed by plaintiffs’ law firms alleging violations of the U.S. securities laws. Based on a preliminary review of the complaints, BigBand Networks believes that it has meritorious defense to these claims.”
The suits were filed by Hagens Berman Sobol & Shapiro of Seattle; Kahn Gauthier Swick of New Orleans; and attorney Howard G. Smith of Bensalem, Pa. Each of the three suits seek class status, but no class has yet been certified by the court. The three firms are soliciting for a BigBand shareholder to serve as lead plaintiff.
Two other lawyers -- Jeffrey A. Berens of Denver and Eric J. O'Bell of Metairie, La. -- have not yet filed any action against BigBand but announced they are investigating doing so.
BigBand shares fell 29% on Sept. 28, the day after lowering revenue expectations, to close at $6.40. On BigBand’s first day of trading March 15, the stock jumped 31% to close at $17 per share.
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