Thursday August 2, 7:00 pm Eastern Time
Press Release
SOURCE: Spector, Roseman & Kodroff, P.C.
Spector, Roseman & Kodroff, P.C. Files Class Action Suit Against Tut Systems, Inc. Alleging Securities Fraud
PHILADELPHIA, Aug. 2 /PRNewswire/ -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of the stock Tut Systems, Inc. (Nasdaq: TUTS - news; ``Tut'') securities during the period from July 20, 2000 through January 31, 2001 (the ``Class Period'').
The complaint charges Tut and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants misrepresented the revenues that Tut was deriving from its sales to small competitive local exchange carriers which were not able to pay for the products purchased from Tut, causing Tut's sales to be inflated and its stock price to be artificially inflated to a Class Period high of $120.37 on 8/29/00. This upsurge in Tut's stock caused by defendants' false and misleading statements enabled the individual defendants to sell 87,100 shares of their Tut stock for proceeds of $8.1 million. By late 11/00, analysts learned that Tut's 4thQ 00 sales would be well below previously forecasted levels, causing the stock to decline. On 11/30/00, Tut revealed to the public that it was in fact suffering a huge decline in revenues, was not posting smaller negative earnings per share growth, and contrary to defendants' repeated assurances, Tut was forced to reveal the problems it had been experiencing during the Class Period in attempting to grow its business. This announcement caused the stock to drop to below $10 per share but the stock continued to trade at artificially inflated levels as defendants concealed the large amount of uncollectible receivables on Tut's books. Then on, 1/31/01, Tut announced huge write-offs of uncollectible accounts receivable and inventory, that its 4thQ 00 revenues had dropped to less than $6 million compared to more than $10 million in the 4thQ 99, and that it was laying off 10% of its workforce. This announcement caused its stock price to drop to as low as $5.84, causing hundreds of millions of dollars in damages to members of the Class.
If you purchased Tut securities during the Class Period, you may, no later than September 10, 2001, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the ``largest financial interest'' in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the ``largest financial interest,'' and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Tut securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@srk-law.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via e-mail at classaction@srk-law.com. For more detailed information about the firm please visit its website at spectorandroseman.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud . As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
SOURCE: Spector, Roseman & Kodroff, P.C.
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