HEADLINE: Lovell & Stewart Announces Securities Fraud Class Action Against
Juniper Networks, Inc., Certain Officers and Directors, and Investment Banks
DATELINE: NEW YORK, Dec. 4, 2001
BODY:
The law firm of Lovell & Stewart, LLP ((212) 608-1900 or
www.lovellstewart.com), acting on behalf of the Plaintiffs' Executive Committee
appointed pursuant to Case Management Order No. 1 in In re Initial Public
Offering Securities Litigation, Docket No. 21-MC-92 (SAS), filed a class action
lawsuit on December 4, 2001 on behalf of all persons and entities who purchased,
converted, exchanged or otherwise acquired the common stock of Juniper Networks,
Inc. (NasdaqNM: JNPR) between June 24, 1999 and December 6, 2000, inclusive.
The lawsuit asserts claims under Section 12 of the Securities Act of 1933 and
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated by the SEC thereunder and seeks to recover damages. Any member of
the class may move the Court to be named lead plaintiff. If you wish to serve as
lead plaintiff, you must move the Court no later than February 2, 2002.
The action, Collegeware Asset Management, LP v. Juniper Networks, Inc., et
al., is pending in the U.S. District Court for the Southern District of New York
(500 Pearl Street, New York, New York), Docket No. 01-CV-10899 (SAS) and has
been assigned to the Hon. Shira A. Scheindlin, U.S. District Judge. The
complaint alleges that Juniper Networks and certain of its officers at the time
of its IPO violated the federal securities laws by issuing and selling Juniper
Networks common stock pursuant to Juniper Networks's initial public offering and
a secondary offering of Juniper Networks stock without disclosing to investors
that several of the underwriters of the Juniper Networks IPO had solicited and
received excessive and undisclosed commissions from certain investors.
In exchange for the excessive commissions, the complaint alleges, defendants
The Goldman Sachs Group, Inc., Credit Suisse First Boston Corporation,
FleetBoston Robertson Stephens, Inc., Royal Bank of Canada (Dain Rauscher
Wessels), SG Cowen Securities Corporation, UBS Warburg LLC (Warburg Dillon Read
LLC), Chase H&Q (formerly Hambrecht & Quist LLC), J.P. Morgan Chase & Co., Inc.,
Lehman Brothers, Inc. and Salomon Smith Barney, Inc., underwriters of Juniper
Networks's IPO, allocated shares of Juniper Networks stock to certain investors
at the IPO price of $5.67 per share. (All stock and price data herein reflect
both Juniper Networks's 3:1 and 2:1 stock splits for shareholders of record as
of December 31, 1999 and May 15, 2000, respectively.) To receive the allocations
(i.e., the ability to purchase shares) at$5.67, the defendant IPO underwriters'
brokerage customers had to agree to purchase additional shares in the
aftermarket at progressively higher prices. The requirement that customers make
additional purchases at progressively higher prices as the price of Juniper
Networks stock rocketed upward (a practice known on Wall Street as "laddering")
was intended to (and did) drive Juniper Networks's share price up to
artificially high levels. This artificial price inflation, the complaint
alleges, enabled both the defendant IPO underwriters and their customers to reap
enormous profits by buying Juniper Networks stock at the $5.67 IPO price and
then selling it later for a profit at inflated aftermarket prices, which rose as
high as $17.67 during its first day of trading.
Rather than allowing their customers to keep their profits from the IPO, the
complaint alleges, the defendant underwriters of Juniper Networks's IPO required
their customers to "kick back" some of their profits in the form of secret
commissions. These secret commission payments were sometimes calculated after
the fact based on how much profit each investor had made from his or her IPO
stock allocation.
The complaint also alleges that Juniper Networks and the defendant
underwriters of the secondary offering of Juniper Networks stock (certain of the
defendant IPO underwriters and Merrill Lynch, Pierce, Fenner & Smith,
Incorporated), were able to price the secondary offering at an artificially high
$31.67 per share due to the continued effects of the foregoing violations.
The complaint further alleges that defendants violated the Securities Act of
1933 because the Prospectuses distributed to investors and the Registration
Statements filed with the SEC in order to gain regulatory approval for the
Juniper Networks offerings contained material misstatements regarding the
commissions that the underwriters would derive from the IPO and failed to
disclose the additional commissions and "laddering" scheme discussed above.
Investors who acquired Juniper Networks, Inc. common stock during the period
June 24, 1999 through December 6, 2000, inclusive may contact Lovell & Stewart
at the telephone number, address or E-mail address below for more information
regarding the class action lawsuit. Investors can also visit Lovell & Stewart's
website at www.lovellstewart.com to view a copy of the complaint.
CONTACT: Lovell & Stewart, LLP
Christopher Lovell
Victor E. Stewart
Ian T. Stoll
212/608-1900
sklovell@aol.com |
