NEW YORK-Touted by some securities analysts last summer as small-cap wireless companies likely to outperform broader markets, Anadigics Inc. and Spectrian Corp. now are defendants in lawsuits filed by unhappy stockholders.
A class-action shareholder lawsuit was filed March 2 in the U.S. District Court for the District of New Jersey against Anadigics, Warren, N.J., “and certain of its officers and directors on behalf of purchasers of the company’s common stock between Aug. 6, 1997, and Jan. 29, 1998, inclusive,” said a notice by the plaintiff’s law firm, Schoengold & Sporn P.C., New York.
Anadigics manufactures Gallium Arsenide semiconductor chips, and it had staked out a position as a supplier to personal communications services handset makers.
“The complaint charges defendants with violations of the federal securities laws … by virtue of their misrepresentation and/or omission of material information concerning the company’s business and revenues, including … Anadigics’ problems with its integrated circuits for wireless communications applications, that resulted in the loss of millions of dollars worth of business from several … key clients.
“In addition, plaintiff alleges that corporate insiders … reaped millions of dollars by improperly selling shares of the company’s common stock at artificially inflated prices while in possession of materially adverse facts.”
Spectrian, headquartered in Sunnyvale, Calif., makes ultra-linear radio-frequency power amplifiers for wireless infrastructure equipment manufacturers.
From December through February, at least six class-action shareholder lawsuits were filed against Spectrian and certain of its officers and directors. All complaints were lodged in the U.S. District Court of the Northern District of California, San Jose Division.
All make allegations similar to those in the first lawsuit, brought Dec. 23 by plaintiff Russ Warye, who is represented by three law firms: Milberg Weiss Bershad Hynes & Lerach, L.L.P., San Diego; Krislov & Associates Ltd., Chicago; and Schiffrin & Craig Ltd., Bala Cynwyd, Pa.
Between July 1 and Oct. 23, the complaint charges the defendants “drove up the price of Spectrian stock … from $12 per share … while its top insiders took advantage of the artificial inflation of its stock price during the class period by a secondary offering in mid-August of 2.3 million shares at $45” each.
Meanwhile, “defendants told the market the robust and growing demand for [Spectrian’s] products and successful relationships with its two largest customers (Northern Telecom and LGIC, formerly Lucky Goldstar Information & Communications) would lead to strong [earnings per share] in Fiscal Year 1998…
“However, in October 1997, they revealed that Spectrian lost an important new contract with its second largest customer (LGIC), and its largest customer (Nortel) has a second source of supply. As a result, Spectrian’s growth would slow and earnings per share would decline. The stock utterly collapsed to as low as $20 per share.”
The other lawsuits include: Sharpe et al v. Spectrian, also represented by Milberg Weiss, as well as Stull Stull & Brody of Los Angeles; Ly v. Spectrian et al, represented by Shoengold & Sporn, the New York law firm that is a plaintiffs’ attorney in the lawsuit against Anadigics, as well as Berman, DeValerio, Pease & Tabacco of San Francisco and Cohen Milstein Hansfeld & Toll P.L.L.C. of Seattle; Robertson et al v. Spectrian, also represented by Milberg Weiss and by Wolf Popper L.L.P. of New York; Copeland v. Spectrian et al, also represented by Berman, DeValerio; John v. Spectrian, represented by Rabin & Garland of New York, Gold Bennett & Cerra L.L.P. of San Francisco and Leo W. Desmond of West Palm Beach, Fla.
