Wolf Popper LLP
In re Scientific-Atlanta, Inc. Securities Litigation
In re Scientific-Atlanta, Inc. Securities Litigation is a securities fraud class action lawsuit on behalf of investors who purchased Scientific-Atlanta (NYSE: SFA) securities on the open market from January 18, 2001, through August 16, 2001 (the “class period”). The action is pending in the U.S. District Court for the Northern District of Georgia (Case No. 1:01-CV-1950-RWS) and is against Scientific-Atlanta, its CEO, James McDonald, and its CFO, Wallace Haislip.
The complaint alleges that during the class period, defendants knowingly or recklessly issued a series of materially false and misleading statements that misled the investing public about Scientific-Atlanta’s business, operations, performance, and prospects. In particular, because of issues concerning cancelled orders and cable companies’ reductions in spending, the management of the company sought to induce customers to substantially increase purchases before they would have in the normal course. This “channel stuffing” practice had the effect of shifting earnings into earlier quarters to the detriment of later quarters. Defendants concealed these practices and accounted for them improperly.
The court denied defendants’ motion to dismiss and granted plaintiffs’ motion for class certification. Merits and expert discovery are complete and before the court is defendants’ motion for summary judgment.
