Weiss & Yourman Files Securities Fraud Action Against AvTel Communications Inc. and Certain of Its Officers and Directors
Business Wire - November 17, 1998 15:46
LOS ANGELES--(BUSINESS WIRE)--Nov. 17, 1998--The following is an announcement by Weiss & Yourman.
"A class action lawsuit on behalf of purchasers of AvTel Communications, Inc. (Nasdaq:AVCO) common stock on November 12, 1998, was filed today in the United States District Court for the Central District of California.
"AVCO represents itself as a provider of broadband network services that integrates voice, data and video networking services for individuals and business customers. The Company purportedly markets and sells a broad range of telecommunications and advanced network services in the Santa Barbara area through independent resellers and internal direct sales persons.
"On or about November 12, 1998, AVCO issued a press release wherein it announced that its DSLink Service would provide 'high-speed Internet access over Asymmetric Digital Subscriber Line (ADSL).' The Company represented that 'ADSL is a new modem-based technology that provides a dedicated connection to the Internet that is up to 50 times faster than conventional modems.' Defendants also stated that AVCO intended to roll out the DSLink Service on a nationwide basis. As a result of these statements, the Company's stock skyrocketed from $2.375 per share to over $36 per share, representing a one-day gain of over 1400 percent before Nasdaq halted trading on the stock.
"On November 13, 1998, the Company admitted that, contrary to its representations just one day earlier, it in fact has no proprietary technology or products at all. Additionally, the Company conceded that it has no existing plans for national expansion. As a result of these admissions, the Company's stock opened at $3.00 per share on Monday, November 16, 1998, after Nasdaq resumed trading on the Company's securities.
"The defendants include AVCO and certain of its officers and directors. The Complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) by, among other things, issuing false misleading statements regarding the Company's existing products and technology, as well as its future business prospects and expansion plans.
"Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Weiss & Yourman, which has significant experience and expertise in prosecuting class actions on behalf of investors and shareholders.
"If you are a member of the class described above, you may, no later than sixty days from the date of this notice, move the Court to serve as lead plaintiff, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
"If you wish to discuss this action, or have any questions concerning this notice, or your rights or interests with respect to this matter, please contact plaintiff's counsel, Matthew Zevin of Weiss & Yourman, at 800/437-7918, or via e-mail at Mzevin@aol.com."
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