Cauley & Geller, LLP Announces Class Action Lawsuit Against Lucent Technologies

Business Wire, Dec 1, 2000

Business Editors & Legal Writers

BOCA RATON, Fla.--(BUSINESS WIRE)--Dec. 1, 2000

Seeking Damages On Behalf of Shareholders

The Law Firm of Cauley & Geller, LLP announced today that a class action was filed on November 28, 2000 on behalf of all individuals and institutional investors that purchased the securities of Lucent Technologies ("Lucent" or the "Company") (NYSE: LU) between October 10, 2000 (when Lucent issued adjusted figures for its fourth quarter 2000 earnings estimates) through November 21, 2000 (when Lucent disclosed that its previously released fourth quarter 2000 revenues and earnings per share guidance would be reduced by $125 million, and 2 cents per share, respectively, due to a "revenue recognition issue"), inclusive (the "Class Period").

The case is pending in the United States District Court for the District of New Jersey, located at 50 Walnut Street, Newark, NJ 07102 (the "Court"). The case number assigned to this matter is 00-CV-5834. The Honorable William H. Walls is the Judge presiding over the case. You may obtain a copy of the complaint from the Court or from Cauley & Geller, LLP.

The complaint charges that defendants Lucent, Henry B. Schacht (Chief Executive Officer and Chairman of Lucent's Board), Richard McGinn (Chief Executive Officer), and Deborah C. Hopkins (Chief Financial Officer) violated the federal securities laws by providing materially false and misleading information about the Company's financial condition, and as a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. Specifically, as alleged in the complaint, on October 10, 2000, Defendants announced in a press release that the Company expected its fourth quarter 2000 earnings to be lower than the previous guidance it had provided to investors and the market. Nonetheless, in this same press release, Defendants stated that "the company expects pro forma earnings per share from continuing operations for the quarter, which ended September 30, 2000, to be in the range of 17 cents to 18 cents per share compared to 24 cents for the year-ago quarter... for the quarter, the company indicated that while it had strong overall growth in the wireless business, it would report flat growth primarily due to a comparison related to a major foreign contract in the year-ago quarter." The complaint alleges that these statements were materially false and misleading when made, because defendants knew (or were reckless in not knowing) that earnings per share for the fourth quarter of 2000 would not be in the range of 17 cents to 18 cents per share due to "revenue recognition" issues disclosed by the Defendants at the end of the Class Period. Furthermore, at the end of the Class Period, Defendants disclosed that pro forma revenues from continuing operations would not "grow about 15 percent for the fourth fiscal quarter of 2000" as they had stated during the Class Period, due to "revenue recognition" issues which had the effect of reducing the Company's revenues by approximately $125 million. Additionally, it is alleged that during the Class Period, Defendants failed to disclose the increasing problems it was experiencing with respect to the collectability of its accounts receivables.

On November 21, 2000, Defendants issued a press release announcing "it has identified a revenue recognition issue impacting approximately $125 million of revenue in its fourth fiscal quarter ended Sept. 30, 2000. The company estimates that the reduction in revenue could have an approximately 2 cent impact on earnings per share for the quarter and the year." Thus, not until November 21, 2000 were investors alerted to the revenue recognition problems present at the Company which, because they were allegedly known to Defendants, but not disclosed, caused the price of Lucent's stock to be artificially inflated during the Class Period. In response to this allegedly belated disclosure, the price of Lucent stock plummeted from its closing price on November 20, 2000 of 20 15/16 to close at 17 9/16 on November 21, 2000, a 16.12% drop, on extremely heavy volume.

If you bought the securities of Lucent between October 10, 2000 and November 21, 2000, you may, no later than January 20, 2001, request that the Court appoint you as lead plaintiff. 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 the 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 Cauley & Geller, LLP, or other counsel of your choice, to serve as your counsel in this action.

Cauley & Geller, LLP has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Florida, Arkansas and California, but represents shareholders from throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's website at www.classlawyer.com.