Law firm Milberg Weiss Bershad Hynes & Lerach LLP announced the filing of
a class action lawsuit
against graphics chip and card maker ATI Technologies Inc. The suit accuses ATI of artificially inflating its stock price for several months last year. Named in the suit are ATI company president, CEO and co-founder Kwok Yuen Ho, former CFO James Chwartacky, and director Jim Fleck.
The law firm says that between January and May of 2000, ATI issued press releases highlighting strong revenue growth and high margins that were “materially false and misleading.” ATI was experiencing declining demand for its products during that time, the law firm claims, while competitors S3 and Neomagic were flooding the market with less expensive products. The law firm also says that ATI failed to write down inventory, resulting in its overstatement of operating results.
On May 24, 2000, ATI issued a press release announcing lower margins and a $56 million inventory write down. The law firm says that this surprise announcement caused ATI’s stock value to drop from US$16.75 per share to $8.4375 per share in two days. (It’s currently trading around $7.29 on the NASDAQ exchange).
The law firm has filed the complaint in the US District Court of the Eastern District of Pennsylvania. The case number is 01-CV-2541. The firm advises that stockholders who bought ATI’s stock between January 13 and May 24 may be eligible to be appointed as lead plaintiff — more details are available from
the Web site.