ALCATEL (NYSE:ALA) sued for alleged misrepresentation
Reuters, Friday, September 18, 1998 at 15:12
NEW YORK, Sept 18 (Reuters) - On the heels of skidding
profits and share price, New York law firm Wolf Popper LLP said
Friday it has filed a class action suit on behalf of
shareholders in a U.S. company acquired by Alcatel (SBF:CGDP)
earlier this month.
The shareholders acquired securities in the French
telecommunications equipment firm in the merger of Net
Acquisition, Inc., a wholly owned subsidiary of Alcatel, with
DSC Communications Corp. (NASDAQ:DIGI).
According to a statement, the complaint charges that
Alcatel violated sections of the Securities Act of 1933 and
1934 by artificially inflating Alcatel's market price and
making misrepresentations and omissions concerning the
financial impact from the slowdown and cancellation of orders
by its European, Russian and Asian customers.
The complaint also alleges that despite knowledge of these
material facts in July, the defendants delayed disclosing the
information until after the merger closed on Sept. 8, in order
to foreclose former DSC shareholders from exercising their
rights to cancel the merger under the merger agreement terms.
When the information was disclosed on Sept. 17, the market
price plunged.
Late Friday, Alcatel's stock was trading at 18 15/16, close
to its year-low of 18 9/16, but below the year-high of 47.
Copyright 1998, Reuters News Service |
