Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit against STEC, Inc.
November 10 2009 - 2:51PM
Business Wire
Coughlin Stoia Geller Rudman & Robbins LLP (“Coughlin
Stoia”) (http://www.csgrr.com/cases/stec/) today announced that a
class action has been commenced in the United States District Court
for the Central District of California on behalf of purchasers of
STEC, Inc. (“STEC”) (NASDAQ:STEC) common stock during the period
between June 16, 2009 and November 3, 2009 (the “Class
Period”).
If you wish to serve as lead plaintiff, you must move the Court
no later than 60 days from November 6, 2009. If you wish to discuss
this action or have any questions concerning this notice or your
rights or interests, please contact plaintiff’s counsel, Darren
Robbins of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via
e-mail at djr@csgrr.com. If you are a member of this class, you can
view a copy of the complaint as filed or join this class action
online at http://www.csgrr.com/cases/stec/. Any member of the
putative class may move the Court to serve as lead plaintiff
through counsel of their choice, or may choose to do nothing and
remain an absent class member.
The complaint charges STEC and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
STEC designs, develops, manufactures and markets custom memory
solutions based on flash memory and dynamic random access memory
technologies.
The complaint alleges that during the Class Period, defendants
issued materially false and misleading statements regarding STEC’s
customers, its competitive position and its prospects. STEC once
had the solid-state drive market to itself. However, the Company
specifically failed to disclose looming threats of competition from
other high technology companies, such that STEC would not be the
only company to gain design wins. Defendants assured investors that
STEC had no competition at that stage. As a result of defendants’
false and misleading statements, STEC stock traded at artificially
inflated prices during the Class Period, reaching a high of $41.84
per share on September 10, 2009. This inflated stock price
permitted the top STEC officers to sell 9 million shares of their
STEC stock in a secondary stock offering in August 2009.
On September 17, 2009, WedBush Morgan published an analyst
report on STEC stating that one of STEC’s customers was in final
qualification stages with one of STEC’s competitors and that the
Company’s competitors would be gaining design wins much earlier
than previously expected. As a result of this report, STEC’s stock
fell $6.37 per share to close at $31.53 per share on September 17,
2009 – a one-day decline of over 16%, on volume of more than 21.2
million shares.
Then, on November 3, 2009, after the market closed, STEC
reported its third quarter 2009 financial results and its fourth
quarter 2009 outlook, announcing that one of its customers would
carry 2009 inventory into 2010, impacting the Company’s first
quarter 2010. On this news, STEC’s stock fell $9.01 per share to
close at $14.14 per share on November 4, 2009, a one-day decline of
over 38%, on volume of more than 31.9 million shares.
Plaintiff seeks to recover damages on behalf of all purchasers
of STEC common stock during the Class Period (the “Class”). The
plaintiff is represented by Coughlin Stoia, which has expertise in
prosecuting investor class actions and extensive experience in
actions involving financial fraud.
Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San
Francisco, Los Angeles, New York, Boca Raton, Washington, D.C.,
Philadelphia and Atlanta, is active in major litigations pending in
federal and state courts throughout the United States and has taken
a leading role in many important actions on behalf of defrauded
investors, consumers, and companies, as well as victims of human
rights violations. The Coughlin Stoia Web site
(http://www.csgrr.com) has more information about the firm.
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