LITTLE ROCK, Ark., Aug. 23, 2002 (PRIMEZONE) -- The Emerson Firm, a securities law class action law firm with offices in Houston, Texas and Little Rock, Arkansas, announced today that a class action has been filed in the United States District Court for the Northern District of California on behalf of purchasers of Riverstone Networks, Inc. (Nasdaq:RSTN) ("Riverstone" or the "Company") securities during the period between August 10, 2001 and June 5, 2002, (the "Class Period"), including those who acquired Riverstone shares and those who acquired Riverstone convertible notes. A copy of the complaint filed in this action is available from the Court, or can be obtained from the Firm.
The complaint charges Riverstone and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Riverstone is a provider of metropolitan area networking solutions that enable service providers to convert raw bandwidth into profitable services over legacy and next-generation infrastructures. During the Class Period, defendants desperately sought to create the impression that Riverstone had the ability to directly enter these markets with a captive client base. Thus, Riverstone, through, among other things, its relationship with Hutchison Global Crossing, could compete head-to-head with the dominant companies in the industry. Prior to its relationship with Hutchison, Riverstone was having difficulty gaining operational momentum within these potentially lucrative Asian markets.
The complaint alleges that each defendant was aware that Riverstone would be unable to meet its projected Q2 02 to Q1 03 revenue and earnings per share ("EPS") targets unless they manipulated the Company's revenue, earnings and receivables. However, because the "appearance" of growth was so critical to defendants' plan to inflate the price of Riverstone shares and sell their own shares and raise monies via its $150 million debt offer, defendants continued to maintain throughout the Class Period that Riverstone would meet revenue projections and EPS when, in reality, defendants knew that Riverstone could not achieve their projections without attempting to fraudulently record revenue by inducing clients who defendants knew did not have the ability to pay to agree to take delivery of goods and that Riverstone was, in fact, suffering from greater losses. Defendants knew that if Riverstone's inability to generate legitimate sales growth from customers who could actually pay was revealed, together with the fact that Riverstone's projected growth was contingent upon sales to clients which defendants knew would be unable to pay pursuant to the Company's internal policy, if ever, due to their own financial deterioration, defendants would not reap the financial rewards of selling their own shares at artificially inflated prices which totaled $7.1 and the $150 million debt offering would be just a pipedream.
If you bought Riverstone securities including those who acquired Riverstone shares and those who acquired Riverstone convertible notes between August 10, 2001 and June 5, 2002 inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than September 24, 2002. If you are a member of this class, you can join this class action by contacting the Investor Relations Department of the Firm. Any member of the purported class may move the Court to serve as lead plaintiff through The Emerson Firm or other counsel of their choice.
The Emerson Firm has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm represents investors throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca