JNI Corporation (JNIC) Sued For Securities Fraud In
Class Action Lawsuit By Bernstein Liebhard &
Lifshitz, LLP
INTERNET WIRE -- A securities class action lawsuit was commenced on behalf all
persons who acquired JNI Corporation (NASDAQ: JNIC - news; "JNI" or the
"Company") securities between October 16, 2000 and March 28, 2001 (the "Class
Period"). A copy of the complaint is available from the Court or from Bernstein Liebhard &
Lifshitz, LLP. Please visit our website at www.bernlieb.com or contact us by phone at
(800)217-1522 or by email at JNIC@bernlieb.com.
The case is pending in the United States District Court for the Northern District of California.
Named as defendants in the complaint are JNI, Terry M. Flanagan, Gloria Purdy, Thomas
K. Gregory, Charles McKnett, Scott Ruple and Eric P. Wenaas.
The complaint charges defendants with violations of sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. JNI designs and
supplies Fibre Channel hardware and software products that connect servers and data
storage devices to form storage area networks ("SANs"). SANs were made possible by the
emergence of Fibre Channel technology, a new generation of server to storage
communications technology that improves data communication speeds, connectivity, distance
between connections, reliability and accessibility. The Company markets high-performance
application-specific integrated circuits ("ASICs"), a broad range of Fibre Channel host bus
adapters and software that facilitates advanced SAN device integration and management.
During the Class Period, JNI made false statements about its business and results causing its
stock to trade at artificially inflated levels. As a result of this inflation, JNI was able to
complete a $382 million stock offering (including the over-allotment) pursuant to a
Registration Statement and Prospectus dated October 19, 2000. Subsequently, at least two
analysts issued extremely favorable reports on JNI based on statements made by JNI
management causing JNI's stock price to increase to $126 per share.
On November 9, 2000, just two and one-half weeks after completing the offering, JNI
admitted that it expected its sales of products designed to work with the SBus interface to decline. JNI's stock price declined in
early November due to stories appearing in the press questioning the Company's competitive position and the pending
resignation of its CEO. However, the stock continued to be inflated as defendants asserted there were no problems with the
business and it was "business as usual," and the CEO asserted that he would stay actively involved with the Company as a
member of the board.
On December 11, 2000, before the markets opened, JNI announced that fourth quarter 2000 revenues would be only
$30-$34 million, and net income was only expected to be $5.0 to $6.2 million. Analysts interpreted this disclosure to indicate
JNI would come in at the low end of these estimates, which were 12% lower than the analysts had been told just a few weeks
earlier. On these disclosures, JNI's stock collapsed to $34-3/4, on huge volume of 13.8 million shares. Then, on January 24,
2001, JNI reported fourth quarter 2000 revenues of only $30.7 million and analysts reduced 2001 EPS estimates to $0.80.
Upon this disclosure, JNI's stock dropped to as low as $20, 84% below the Class Period high, on volume of 4.4 million
shares.
However, more bad news was yet to be disclosed. On January 24, 2001, JNI reported fourth quarter 2000 revenues of only
$30.7 million causing analysts to reduce 2001 EPS estimates to $0.80. Moreover on February 6, 2001, JNI's former CEO
announced his resignation. Finally, on March 28, 2001 JNI revealed that revenues for the first quarter 2001 would be only
$20-$21 million. In response, JNI's stock price plunged to $7-3/8 per share, 94% below its Class Period high.
Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired JNI securities during the Class
Period. If you purchased or otherwise acquired JNI 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. In order to do so, you must meet certain
requirements set forth in the applicable law and file appropriate papers no later than June 1, 2001.
Alead 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 plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not
to serve as a lead plaintiff. You may retain Bernstein Liebhard & Lifshitz, LLP, or other counsel of your choice, to serve as
your counsel in this action.
Bernstein Liebhard & Lifshitz, LLP has been retained as one of the law firms to represent the Class. The attorneys at Bernstein
Liebhard & Lifshitz, 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. For more information about Bernstein Liebhard &
Lifshitz, LLP, please visit our website at www.bernlieb.com.
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 Ms. Linda Flood, Director of Shareholder Relations, at Bernstein Liebhard &
Lifshitz, LLP, 10 East 40th Street, New York, New York 10016, (800) 217-1522 or 212-779-1414 or by e-mail at
JNIC@bernlieb.com.
Contact:
Linda Flood
Bernstein Liebhard & Lifshitz, LLP
800-217-1522
JNIC@bernlieb.com. |
