Peter Principle - re: ", just look at the times surprise losses and the successful lawsuits."
Lawsuits like these ?
Advanced Micro Sued for Securities Fraud on Production
Glitch
Bloomberg News
March 10, 1999, 4:52 p.m. PT
Advanced Micro Sued for Securities Fraud on Production Glitch
Sunnyvale, California, March 10 (Bloomberg) -- Advanced
Micro Devices Inc., Intel's biggest competitor in the computer-
chip market, and its chief executive were sued in federal court
by shareholders alleging that they violated securities laws by
withholding information about recent production problems.
Lawyers for AMD shareholders allege that AMD knew about
production snafus that hurt fourth-quarter sales but neglected to
tell analysts and investors about the problems until after the
quarter had ended, when the news caused AMD shares to tumble.
AMD, which on Monday said it would lose money in the first
quarter because of the glitches, has been sued by shareholders
before. Last year, it agreed to pay about $11.5 million to settle
a 1995 shareholder class-action lawsuit over the delayed debut of
its K5 microprocessor, a rival to Intel's Pentium.
Microprocessors are the brains of a personal computer.
In the new suit, lawyers for shareholders contend that
Sunnyvale, California-based AMD did nothing to discourage
investors from expecting strong fourth-quarter results, even
though executives knew the company's plants weren't churning out
enough chips to capitalize fully on strong demand.
``Unbeknownst to the investing public, AMD's much-ballyhooed
road to success in the 1998 fourth quarter had hit a major
pothole,'' according to the suit, which was filed in federal
district court for the Northern District of California.
``We can't comment without seeing the suit,'' said AMD
spokesman John Greenagel. ``It would be inappropriate to say
anything until we see what the allegations are.''
Design Flaw
In a conference call with analysts on Jan. 13, AMD disclosed
that a design flaw had rippled through its manufacturing process,
cutting output of its highest-powered processors.
Just before the call, AMD reported fourth-quarter earnings
that fell short of expectations because of the glitch. AMD said
it earned $22.3 million, or 15 cents a share, compared with a
loss of $12.3 million, or 9 cents, a year earlier.
AMD was expected to earn 19 cents, the average of analysts'
estimates compiled by First Call Corp. in Boston.
When trading started the next day, AMD shares tumbled 19
percent. They've fallen 37 percent since the earnings report.
Lawyers for AMD shareholders sued both the company and
Sanders for violating securities laws. They are asking the court
to make the suit a class action and are seeking damages.
AMD shares fell 1/8 to 17 3/8 today.
--Anthony Effinger in the San Francisco newsroom
{====================================}
Thursday April 23, 10:57 am Eastern Time
AMD reaches securities suit settlement
SUNNYVALE, Calif, April 23 (Reuters) - Advanced Micro Devices said Thursday it agreed in principle to settle a class action securities lawsuit against it and some current and former officers and directors.
The agreement is subject to board approval and confirmation by the United States District Court in San Jose, California.
The suit, filed in November 1995, related to its AMD-K5 microprocessor development project.
If approved, the cost of settlement would be $11,500,000. AMD is adjusting its first quarter results to reflect the settlement, which net of tax, increases the quarterly loss by $0.05 per share to $62,727,000.
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