NEW YORK-Transcrypt International Inc., a Lincoln, Neb., manufacturer of wireless information security and land mobile radio products, has been sued by shareholders in a class action lawsuit filed March 31.
Also subject of a shareholder lawsuit filed last month is AML Communications Inc., a Camarillo, Calif., designer and manufacturer of multicarrier and masthead amplifiers for cellular, personal communications services, paging and satellite communications carriers.
The suit against AML, filed in the U.S. District Court for the Central District of California, covers a period between April 10, 1996, and March 25, 1997. It alleges the company and certain of its officers misrepresented AML’s financial condition, including negative trends in sales.
The lawsuit against AML also charges that the defendants sold more than 679,000 shares of company stock during the class period, gaining proceeds of more than $11.4 million.
In the Transcrypt case, the lawsuit was filed just days after the company announced March 27 it must delay filing of its annual report with the Securities and Exchange Commission. The postponement will allow its auditors to resolve “complex accounting principles” as they apply to certain transactions the company engaged in during fiscal 1997, the company said.
The company’s stock fell by $6.50 to $9.87 at the close of trading March 27, and dipped to $8.87 just before the lawsuit was lodged against the company in the U.S. District Court for the District of Nebraska. The lawsuit covers the period between Oct. 15, 1997, and March 27, 1998.
“Among other things, plaintiff claims that defendants’ material omissions and dissemination of materially false and misleading statements regarding the nature of Transcrypt operations drove [its] stock price to a class period high of $27 per share, and enabled insiders to profit from sales of Transcrypt stock at artificially inflated prices,” the suit alleges.
Transcrypt acknowledged the lawsuit against the company, its president and chief executive officer, Jeffery L. Fuller, and its chairman of the board, John T. Connor.
“The company is in the process of reviewing the complaint and feels it is premature to comment on the lawsuit,” Connor said in a release Transcrypt issued April 2.
“In light of the volume of shares that traded on Friday (March 27) and the decline in the stock price, it is not unexpected that the plaintiffs’ bar will file any number of class action lawsuits.”
