Securities Case against Corning and Company Officers Dismissed — Nixon Peabody LLP Represented the Defendants

Business Wire, April 1, 2005

ROCHESTER, N.Y. -- The United States Court of Appeals for the Second Circuit has upheld the dismissal of a proposed class action securities fraud complaint against Corning Incorporated and several of its officers alleging violations of Sections 11 and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In a decision dated March 30, 2005, the appellate court ruled that Judge Charles J. Siragusa of the United States District Court for the Western District of New York correctly decided that the defendants, represented by Nixon Peabody LLP, were not liable for losses caused by the decline in the price of Corning stock between September 2000 and July 2001. The corporate officers named in the suit included Roger G.

Ackerman, who served as chief executive officer and chairman of the board of directors; Katherine A. Asbeck, who served as senior vice president, controller, and principal accounting officer; and James B. Flaws, who served as executive vice president and chief financial officer.

The plaintiffs alleged that the defendants misrepresented demand for Corning's photonics products, the value of goodwill associated with two multibillion-dollar acquisitions, and the value of Corning's photonics-related inventory. According to the plaintiffs, although Corning made a series of increasingly cautionary warnings and dire predictions about its business beginning in January 2001, as the telecommunications market deflated, the true facts were disclosed only in July 2001.

The Court of Appeals held that Judge Siragusa was correct in dismissing all claims of wrongdoing by Corning and its executives. Noting that plaintiffs had not provided any support to prove that Corning was aware that its business would slow, the Court affirmed Judge Siragusa's ruling that Corning was not required to be clairvoyant, and that Corning's expressions of hope regarding future earnings were tempered by sufficient warnings of risks.

The defendants were represented by Carolyn G. Nussbaum and Richard A. McGuirk, partners at Nixon Peabody LLP. Nixon Peabody's Securities Litigation Team represents public and private companies, broker-dealers, and financial services companies, as well as individual officers, directors, and employees, in litigations, arbitrations, and regulatory actions and investigations involving claims relating to the sale of securities.

Nixon Peabody LLP is one of the 50 largest law firms in the United States with more than 600 attorneys working in 15 major practice areas. The firm's size, diversity, and advanced technological resources enable it to offer comprehensive legal services to individuals and organizations of all sizes in local, state, national, and international matters.