A class action lawsuit was filed on behalf of purchasers of Copper Mountain Networks, Inc. (NASDAQ:CMTN) common stock between April 19, 2000 and October 17, 2000 (the "Class Period") for violations of the federal securities laws. Defendants include Copper Mountain and certain of its officers.
The Complaint alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges that defendants issued false and misleading public statements concerning Copper Mountain's business with one its largest customers, Lucent Technologies, Inc. and its projected financial performance for fiscal year 2000 and beyond. Because the appearance of future growth was critical to defendants' plan to inflate the price of Copper Mountain common stock, and because the Company's business relationship with Lucent was faltering, defendants repeatedly assured the market during the Class Period that Copper Mountain would post fiscal year 2000 revenues of at least $325 million and earnings per share of at least $1.00 when defendants knew that the Company could not possibly achieve those targets.
In addition to having actual knowledge that their statements were false and misleading, defendants sold $15 million worth of their own Copper Mountain stock for prices as high as $90 per share.
On October 17, 2000, the Company disclosed that its revenue and earnings per share would decline, in contrast to defendants' repeated assurances that Copper Mountain would continue to enjoy strong growth, including a statement just five days earlier by defendant Richard Gilbert, the Company's President and Chief Executive Officer, that the market for Copper Mountain's products remained strong. Defendants' disclosure shocked the market, causing the price of Copper Mountain stock plummet to less than $10 per share on record trading volume of more than 23 million shares.

Update

This case was dismissed on June 23, 2004.