Shareholder Files Suit Against 3COM Corporation (COMS) and Certain
Officers and Directors Alleging Material Misstatements
PHILADELPHIA, Dec. 8 /PRNewswire/ -- Counsel for Class Plaintiffs, Barrack, Rodos &
Bacine, today issued the following:
A class action has been commenced in the United States District Court for the Northern District
of California on behalf of purchasers of 3COM Corporation ("3COM") (Nasdaq: COMS)
common stock from May 19, 1997, to November 6, 1997 (the "Class Period").
The Complaint alleges that defendants made false and misleading statements, inter alia, about
3COM's acquisition of U.S. Robotics, the Company's success in integrating U.S. Robotics'
operations into 3COM's, and the state of 3COM's inventories and the progress being made to
reduce them. The complaint also alleges that 3COM falsified its first quarter 1998 financial
results for the period ending August 31, 1997, by artificially inflating 3COM's revenues and
earnings per share. In truth, 3COM's acquisition of U.S. Robotics was a disaster in that U.S.
Robotics had accumulated millions of dollars of excessive inventories which could be sold only
at very low prices; there were serious problems in integrating U.S. Robotics' operations with
3COM's; and 3COM was unable to reduce its inventories. 3COM's earnings report for the first
quarter of 1998 improperly recognized revenue and failed to take required writedowns. The
purpose for these misstatements was to artificially inflate the price of 3COM stock from $37 to
a high of more than $59 so that 3COM insiders could sell more than 2.6 million shares of the
stock for more than $130 million before the true condition of 3COM would be discovered by
investors. When the truth about 3COM began to be revealed in November 1997, 3COM stock
fell from $45 to $28.50, a 37% decline in just six trading days.
The plaintiffs seek to recover damages on behalf of all purchasers of 3COM stock during the
Class Period and is represented by, inter alia, the law firm of Barrack, Rodos & Bacine, which
has extensive experience in prosecuting investor class actions. Barrack, Rodos & Bacine has
prosecuted securities, antitrust and consumer class actions for over 20 years from offices in
Philadelphia, San Diego, New York, Boston and New Jersey and has been designated lead
counsel by federal and state courts across the country in large, complex cases. One Court has
described the firm as "recognized nationally to be a leading and skillful practitioner in the field of
complex class actions." For more information about Barrack, Rodos & Bacine, visit their
website at barrack.com.
If you are a member of the Class described above, you may, no later than February 1, 1998,
move the Court to serve as lead plaintiff of the Class, 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 case or your rights or
interests, please contact the Shareholder Relations Manager at Barrack, Rodos & Bacine, 3300
Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103, at 800-417-7305 or
215-963-0600, fax number 888-417-7306 or 215-963-0838 or by e-mail at
BARRACK@ix.netcom.com.
Copyright 1997, PR Newswire
CONTACT: Counsel for Class Plaintiffs, Barrack, Rodos & Bacine, Shareholder Relations
Manager, 800-417-7305, or 215-963-0600, or fax 888-417-7306, or 215-963-0838, or e-mail,
BARRACK@ix.netcom.com
nasdaq!
For those who are counting, this is the third suit.
o~~~ O |
