Zwerling, Schachter & Zwerling have filed a class action lawsuit with the United States District Court for the Northern District of Illinois, on behalf of all persons and entities who purchased the common stock of Motorola between February 3, 2000 and May 14, 2001.
The complaint alleges that defendants violated the Securities Exchange Act of 1934 by issuing a series of material misrepresentations to the investing community during the Class Period thereby artificially inflating the price of Motorola common stock.
As alleged in the complaint, defendants made numerous false statements about transactions between Motorola and Turkey’s Telsim Mobil, a wireless telecommunications carrier. On February 3, 2000, Motorola issued a press release announcing that it had entered into a three year agreement to provide products and services to Telsim with potential revenue of $1.5 billion.
Motorola failed to disclose that the agreement with Telsim required Motorola to provide Telsim with $1.7 billion in vendor financing. In effect, Motorola was loaning Telsim the money used to purchase Motorola products and services; forcing Motorola to bear the significant risk of default.
In March 2001, Motorola filed its Annual Proxy Statement with the Securities and Exchange Commission in which Motorola only partially disclosed the magnitude of its vendor financing commitments and failed to disclose the precarious nature of those loans. On April 6, 2001, shares of Motorola stock dropped twenty-three percent. Six weeks later, Motorola's revealed that $728 million of the Telsim loan was past due and that Motorola actually had loaned Telsim two billion dollars in vendor financing, $300 million more than previously disclosed. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
