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Compliance February 4, 2004
Investors' Lawyers to Widen Network Associates Suit
April 26, 2002 (PLANSPONSOR.com) - The Teachers'
Retirement System of Louisiana, lead plaintiff in the class
action lawsuit against Network Associates Inc., said it would
widen the suit to include claims that investors lost money
buying the company's stock after inaccurate 1999 and 2000
financial statements.
Reported by Fred Schneyer
The Louisiana teachers group filed suit in September 2001, alleging investor losses on Network Associates’ stock purchased between July 19, 2000 and December 26, 2000. The suit, filed in the US District Court for the Northern District of California, names the company and several former officers as defendants.
The suit charges that the former Network Associates officials violated federal securities laws by lying about the company’s financial health during the July to December 2000 period.
The latest announcement about broader allegations grow out of an April 25, 2002 Network Associates announcement that it had discovered 1999 and 2000 financial “inaccuracies” and was restating its financial statements for those years because of them.
Lawyers for the investors now claim those “inaccuracies” are similar to the charges contained in their original September 2001 suit.
The SEC Steps In
The April “inaccuracies” announcement followed word in March 2002 that the Securities and Exchange Commission had kicked off an investigation of the company’s accounting practices under prior management.
The probe was said to focus on Network Associates’ accounting during its fiscal year ending December 31, 2000.
In late 2000, Chief Executive Officer William Larson and two of his top executives resigned after a series of accounting problems, which prompted the once highflying technology company to report a surprise loss and caused its stock to plunge.