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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Socalsteve who wrote (16470)	11/29/1999 12:39:00 PM
From: MangoBoy	Read Replies (2) \| Respond to of 27311

[Justices Reject Valence Tech Appeal In Shareholder Suit] Dow Jones Newswires -- November 29, 1999 -- WASHINGTON (Dow Jones)--The U.S. Supreme Court let stand a ruling that will allow Valence Technology Inc. (VLNC) shareholders to proceed with a class-action securities fraud suit against the company. The justices Monday turned away an appeal from the Henderson, Nev., battery maker. Valence argued that a San Francisco-based U.S. appeals court erred when it reinstated the 1994 lawsuit in April. The appeal revolves around the one-year statute of limitations for bringing U.S. securities-fraud claims. At issue: When does the 12-month clock start ticking? Valence went public in 1992, and soon after announced an agreement with communications giant Motorola Inc. (MOT) to supply up to $100 million worth of cell-phone batteries. But the deal didn't pan out; Valence announced in 1994 that it was unable to make batteries that met Motorola's specifications. The company's stock plunged, and shareholders cried foul. They alleged that Valence had overstated the significance of the Motorola agreement and made false statements about its battery technology. But there were warning signs well before the announcement, Valence argued. A critical story 15 months earlier in Forbes magazine accused company insiders and investment bankers of "energizing" the stock of "a company whose main asset is an unproven technology." The article also said the Motorola contract was "much less than meets the eye." Valence asked a U.S. judge to dismiss the suit, arguing the Forbes story should have triggered the 12-month statute of limitations. The judge agreed, concluding the Forbes article was "sufficiently fact-specific and comprehensive to put a reasonable person on notice of fraud." The Ninth U.S. Circuit Court of Appeals found otherwise. "A press article's general skepticism about a company's future prospects is not sufficient to excite inquiry into the specific possibility of fraud," the court said. The Supreme Court, in a 1991 opinion, said the clock starts ticking upon the "discovery of the facts constituting the violation." That's led to conflicting rulings from lower courts, said Valence's attorneys, who urged the Supreme Court to use the case to set a uniform, national standard. Valence's appeal was backed by the National Venture Capital Association. "A uniform legal standard for triggering the limitations period is essential to curb the filing of opportunistic securities claims," the group said in a friend-of-the-court brief. Attorneys for shareholders said the Ninth Circuit ruling was correct, and that Valence was asking the justices to "review what amount to trivial differences in semantics." The case is Valence Technology Inc. versus Berry, 99-476.