More Trouble for Vitesse
Online staff -- EDN, May 1, 2006
Vitesse Semiconductor Corp. shareholders Friday announced they are preparing a class action suit against the Camarillo, Calif.-based communications chip provider for recent omissions of faulty financial reporting.
N.Y.-based Rosen Law Firm is preparing a class action lawsuit on behalf of investors who purchased Vitesse stock from June 30, 2003 to April 26 of this year against the company and its current and former management.
The firm has commenced an investigation into allegations that Vitesse may have violated the federal securities laws by issuing false and misleading financial statements during the reporting periods for the three months ended December 31, 2005 and the three years ended September 30, 2005.
Vitesse announced on April 18 it that it had appointed a special committee of independent directors to conduct an internal investigation relating to past stock option grants, the timing of such grants and related accounting and documentation, noted the law firm. The company also announced that it had put on "administrative leave" Vitesse’s founder and current CEO Louis Tomasetta, CFO Yatin Mody and the Executive VP Eugene Hovanec. Following this announcement, Vitesse stock fell 20 percent.
The suit followed a company announcement Friday when Vitesse said that as a result of the ongoing internal investigation, the company's "reported financial statements for the three months ended December 31, 2005 and three years ended September 30, 2005 and possibly earlier periods should not be relied upon."
Vitesse also announced for the first time, that "additional issues have arisen concerning the company's practices in connection with credits issued to or requested by customers (for returned products or otherwise) and the related accounting treatment, as well as the application of payments received to the proper accounts receivable." Rosen said that as a result of this announcement the company's stock fell an additional 27 percent.
Vitesse could not be reached for comment.
