Two Lawsuits? S3 Faces Investor Class Action for State Securities Laws Violations
SEATTLE--(BUSINESS WIRE)--Nov. 13, 1997--On Nov. 12, 1997, the Seattle office of the law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C., on behalf of their clients, filed a class action lawsuit in the California Superior Court for the County of Santa Clara on behalf of purchasers of the common stock of S3 Incorporated (Nasdaq: SIII - news), during the period of April 21, 1997 through Nov. 3, 1997.
The suit names S3 as a defendant, as well as Gary Johnson (CEO and President). S3 claims to be the world's largest supplier of graphics, video and multimedia acceleration hardware and its associated software for leading personal computer platforms and operating systems.
The suit asserts claims against S3 and the individual defendants for violations of the California Corporations Code. According to the complaint, during the class period the defendants engaged in a fraudulent scheme and course of conduct that operated as a fraud and deceit on all persons who purchased S3 common stock. Defendants issued false and misleading statements about the business, financial condition, performance and prospects of S3, which served to artificially inflate the price of S3 common stock. In particular, the company materially and substantially overstated its sales revenues and earnings as a result of the improper recognition of revenue associated with sales to several international distributors of the company's products.
On Nov. 3, 1997, the company shocked the market when it disclosed that it was improperly recognizing revenue from sales to certain international distributors, and that, as a result, it would restate revenues and earnings for several previous quarters.
The company estimated it would need to restate revenues downward by a cumulative total of between $40 million and $70 million. S3's sudden and unexpected revelation caused a precipitous drop in its share price, causing significant damage to its stockholders. The stock closed at $7.34 per share on Nov. 4, 1997, well off its Class Period high of $17.44.
Plaintiff's counsel -- Cohen, Milstein, Hausfeld & Toll, P.L.L.C. -- has significant experience in prosecuting investor class actions and actions involving financial fraud. The firm has offices in Seattle and Washington, D.C., and is active in major litigation pending in federal and state courts throughout the nation. The firm's reputation for excellence has been recognized on repeated occasions by the courts, which have appointed the firm to lead positions in countless complex, multi-district or consolidated litigations, including numerous cases on behalf of defrauded investors, where the firm has been responsible for recovering, in the aggregate, hundreds of millions of dollars. Visit the firm's website at www.cmht.com .
If you have any questions about this action, or with regard to your rights please contact one of the following attorneys: Steven J. Toll (stoll@siteconnect.com), Matthew J. Ide (mide@siteconnect.com) or Jessica A. Eaves (jeaves@siteconnect.com), of Cohen, Milstein, Hausfeld & Toll P.L.L.C., 1301 Fifth Ave., Suite 2905, Seattle, WA 98101, 888/240-1238 or 206/521-0080. |
