A class action complaint was filed on behalf of all persons who acquired Cisco Systems, Inc., (NASDAQ: CSCO) securities between August 10, 1999 and April 16, 2001, inclusive (the "Class Period"). The complaint charges Cisco Systems, Inc., and its top officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Cisco and its subsidiaries are engaged in selling products for networking for the Internet.
The complaint alleges that at the beginning of the Class Period, Internet Service Providers and competitive local telephone companies had technology to deploy but little capital, and Cisco used this an as opportunity to increase its sales by providing capital financing to such companies but making such financing conditional upon the purchase of large amounts of Cisco product. Through this manipulation and the shipment of defective products, as well as Cisco's failure to adequately accrue for excess and overvalued inventory and uncollectible finance receivables, Cisco was able to report "record" earnings each quarter during the Class Period. Defendants made false statements about Cisco's products, financial results and business during the Class Period. As a result, Cisco's stock traded as high as $82. After completing more than 20 major acquisitions between September 1999 and February 2001, Cisco announced disappointing 2ndQ F01 results. This disclosure caused Cisco's stock to decline to less than $30 per share before closing at $31-1/16 per share on 2/27/01. Cisco further announced a 2.5 billion write-down of its inventory on April 16, 2001. This was one of the largest write-downs in the history of the world.
The complaint alleges that as a result of the defendants' conduct, plaintiff and other members of the Class suffered damages.

Update

On November 14, 2001, the court consolidated all the securities cases against Cisco into one case entitled "In re Cisco Systems, Inc. Securities Litigation" and appointed lead plaintiff and lead class counsel.
On May 15, 2002, counsel for plaintiffs filed a consolidated class action complaint, to which defendants filed a motion to dismiss. Pursuant to the Court's ruling on the motion, plaintiffs filed a First Amended Complaint on December 6, 2002. Again, defendants filed motions to dismiss this complaint.
On April 23, 2003, the court denied defendants motion to dismiss the First Amended Complaint.
On May 27, 2004, the Court granted plaintiffs' motion to certify this action as a class action on behalf of all persons and entities who purchased or otherwise acquired Cisco securities between August 10, 1999 and February 6, 2001, and also certified the four Lead Plaintiffs (Plumbers & Pipefitters National Pension Fund; Central States, Southeast and Southwest Area Pension Fund; Carpenters Pension Fund of Illinois; and Alexander Nehring) as representatives of the plaintiff class.
On December 5, 2006, the Court granted final approval of the settlement of this action. Claim forms must be mailed to the claims administrator and postmarked no later than December 21, 2006. Copies of the notice and claim form can be downloaded or printed at Gilardi.com.
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