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Wolf Haldenstein Adler Freeman and Herz LLP Commences Class
Action Lawsuit on Behalf of Conexant Systems, Inc. Shareholders
NEW YORK, Jan. 25 /PRNewswire/ -- Wolf Haldenstein Adler Freeman & Herz LLP
filed a class action lawsuit in the United States District Court for the
District of New Jersey, on behalf of all persons who purchased or otherwise
acquired the securities of Conexant Systems, Inc. ("Conexant" or the "Company")
[Nasdaq: CNXT] between March 1, 2004 and November 4, 2004, inclusive, (the
"Class Period") against defendants Conexant and certain officers and directors
of the Company.
The case name is Gaines v. Conexant Systems, Inc., et al. A copy of the
complaint filed in this action is available from the Court, or can be viewed on
the Wolf Haldenstein Adler Freeman & Herz LLP website at http://www.whafh.com/.
The complaint alleges that defendants violated the federal securities laws by
issuing materially false and misleading statements throughout the Class Period
that had the effect of artificially inflating the market price of the Company's
securities.
Throughout the Class Period, defendants issued statements, press releases and
filed quarterly and annual reports with the SEC describing the Company's
business operations and financial condition. The Complaint alleges that these
representations were materially false and misleading because they failed to
disclose the following adverse facts: (a) that the Company was stuffing the
channel with products, such that its revenues did not reflect the true, end-
user demand for its products; (b) that the Company's inventory glut would lead
to lowered revenues as distributors and retailers would need to exhaust
existing inventory before purchasing new products from Conexant; (c) that the
combined company was suffering from serious operating deficiencies,
particularly in the wireless local area network ("WLAN") division of Globespan
that was not effectively integrated into the combined company's operations,
causing the Company to lose its leadership position in the WLAN market; and (d)
that, contrary to defendants express representations that the Globespan
integration was "on schedule" and that "outstanding progress" was being made in
that regard, integration of the Globespan acquisition was mishandled, causing
such a massive drain on the Company that, by the end of the Class Period, the
outlook for the much larger combined company was worse than Conexant's
stand-alone prospects.
On November 4, 2004, defendants issued a press release announcing disappointing
results for the fourth quarter of 2004, including a loss of $367.5 million
($0.79 per share) which was blamed on poor demand, inventory buildup and failed
product launches. Later that day, the Company held a conference call to
discuss its fourth quarter results. Defendant Geday's response to an analyst's
question revealed that the Company's inventory glut was not a recent
phenomenon, but had been building for as long as five quarters. In reaction to
the Company's press release and conference call, the price of Conexant
securities dropped to $1.60 per share on November 5, 2004 from $1.76 on
November 4, 2004. As detailed in the complaint, earlier announcements that
only partially disclosed the facts about Conexant's business had already taken
a heavy toll on Conexant's stock price, which traded as high as $7.77 per share
during the Class Period.
If you purchased or otherwise acquired Conexant securities during the Class
Period, you may request that the Court appoint you as lead plaintiff by
February 15, 2005. A lead plaintiff is a representative party that acts on
behalf of other class members in directing the litigation. In order to be
appointed lead plaintiff, the Court must determine that the class member's
claim is typical of the claims of other class members, and that the class
member will adequately represent the class. Under certain circumstances, one
or more class members may together serve as "lead plaintiff." Your ability to
share in any recovery is not, however, affected by the decision whether or not
to serve as a lead plaintiff. You may retain Wolf Haldenstein, or other
counsel of your choice, to serve as your counsel in this action.
Wolf Haldenstein has extensive experience in the prosecution of securities
class actions and derivative litigation in state and federal trial and
appellate courts across the country. The firm has approximately 60 attorneys
in various practice areas; and offices in Chicago, New York City, San Diego,
and West Palm Beach. The reputation and expertise of this firm in shareholder
and other class litigation has been repeatedly recognized by the courts, which
have appointed it to major positions in complex securities multi-district and
consolidated litigation.
If you wish to discuss this action or have any questions, please contact Wolf
Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York
10016, by telephone at (800) 575-0735 (Fred Taylor Isquith, Esq., Lawrence
Kolker, Esq., Gustavo Bruckner, Esq., or Derek Behnke), via e-mail at or visit
our website at http://www.whafh.com/. All e-mail correspondence should make
reference to Conexant.
DATASOURCE: Wolf Haldenstein Adler Freeman & Herz LLP
CONTACT: Fred Taylor Isquith, Esq., Lawrence Kolker, Esq., Gustavo
Bruckner, Esq., or Derek Behnke, all of Wolf Haldenstein Adler Freeman & Herz
LLP, +800-575-0735,
Web site: http://www.whafh.com/