NEW YORK, Feb. 5, 2003 (PRIMEZONE) -- Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the District of Utah on behalf of a class (the "Class") of all persons or entities who purchased securities of ClearOne Communications, Inc. ("ClearOne" or the "Company") (Nasdaq:CLRO) between January 16, 2001 and January 15, 2003, inclusive (the "Class Period").
The Complaint charges ClearOne and, Frances M. Flood, the Company's Chairman, CEO and President, and Susie S. Strohm, the Company's CFO and Vice President of Finance with violations of the Securities Exchange Act of 1934.. The Complaint alleges that, in order to inflate the price of ClearOne's stock, defendants caused the Company to falsely report its financial results during the Class Period through improper revenue recognition practices, including recognizing revenue for shipments to distributors even though the distributors had the right to return or exchange unsold goods.
As a result of this inflation, ClearOne was able to complete a private offering of 1.2 million shares, raising proceeds of $25.5 million on December 11, 2001. On January 15, 2003, the last day of the Class Period, the Securities and Exchange Commission ("SEC") filed a federal lawsuit alleging that defendants violated numerous federal securities laws, primarily through a program of "channel stuffing" -- shipping large amounts of inventory to the company's distributors with the understanding that the distributors did not have to pay for these products until the distributors resold the products, and that in some instances the distributors were given the right to return or exchange products the distributors were unable to sell. The stock dropped below $1.50 per share on this news, more than 90% lower than its Class Period high. On February 28, 2003, it was announced that the U.S. Attorney in Utah began an investigation of ClearOne stemming from the SEC Complaint.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired ClearOne securities during the Class Period. If you purchased or otherwise acquired ClearOne securities during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased ClearOne securities during the Class Period, you may, no later than March 17, 2003 request that the Court appoint you as lead plaintiff.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiffs.'' Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Abbey Gardy, LLP has been retained as one of the law firms to represent the Class. The attorneys at Abbey Gardy, LLP have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of millions of dollars to investors. If you would like to discuss this action or if you have any questions concerning this Notice or your rights as a potential class member or lead plaintiff, you may contact Nancy Kaboolian, Esq. of Abbey Gardy, LLP at (800) 889-3701 or email Nkaboolian@abbeygardy.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca