Milberg Weiss Announces The Filing Of A Class Action Suit Against ATI Technologies Inc. and Certain Of Its Officers and Directors on Behalf of Investors NEW YORK--(Business Wire)--Sep 08, 2005--
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18:22 ET NEW YORK--(Business Wire)--Sep 08, 2005--
The law firm of Milberg Weiss Bershad & Schulman LLP
announces that a class action lawsuit was filed today, on behalf of
all persons who purchased or otherwise acquired the securities of ATI
Technologies Inc. ("ATI" or the "Company") (NasdaqNM: ATYT), between
October 7, 2004 and June 22, 2005, inclusive (the "Class Period"),
seeking to pursue remedies under the Securities Exchange Act of 1934
(the "Exchange Act"). A copy of the complaint filed in this action is
available from the Court, or can be viewed on Milberg Weiss's website
at:
http://www.milbergweiss.com
If you purchased or otherwise acquired the securities of ATI
between October 7, 2004 and June 22, 2005, inclusive, and sustained
damages, you may, no later than October 17, 2005, 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 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
Milberg Weiss Bershad & Schulman LLP, or other counsel of your choice,
to serve as your counsel in this action.
The action, case no. 05-CV-4816, is pending before the Honorable
Thomas N. O'Neill, Jr. in the United States District Court for the
Eastern District of Pennsylvania against defendants ATI, Kwok Yuen Ho
(Chairman), David E. Orton (President and CEO), and Patrick G. Crowley
(CFO). According to the complaint, defendants violated sections 10(b)
and 20(a) of the Exchange Act, and Rule 10b-5, by issuing a series of
material misrepresentations to the market during the Class Period.
The complaint alleges that ATI designs and manufactures graphics
processing products and technology for desktop and notebook personal
computers ("PCs"), and for consumer electronic devices. Throughout the
Class Period, ATI reported strong financial results in publicly
disseminated press releases and in filings with the SEC. In addition,
defendants repeatedly issued positive guidance, claiming that ATI's
purported leadership in graphics and multimedia technologies in the
consumer electronics and PC markets would "continue driving growth for
ATI in fiscal 2005." As a result of these statements, the price of ATI
stock became artificially inflated during the Class Period. Certain
Company insiders, including defendants Kwok Yuen Ho and David E. Orton
took advantage of the artificial inflation in the price of the
Company's stock, and during the Class Period, each sold approximately
40% of their personally-held ATI stock for total proceeds of over $54
million. Ho and his wife had allegedly engaged in a similar pattern of
insider trading in 2000, and reaped $7 million in proceeds therefrom.
The truth began to emerge on June 6, 2005. On that day, ATI warned
that its revenues for the third quarter 2005 would be $530 million, 5%
below the Company's guidance. The Company stated that a shift in its
product mix towards the lower end of the desktop and notebook market
contributed to a decline in gross margin for the quarter. In addition,
ATI claimed that the production of integrated graphics processor
products, which had margins well below the corporate average,
contributed to lower profit margins, and stated that it was
experiencing lower than anticipated yields on certain products due to
operational issues. As a result, the Company lowered its guidance for
its third and fourth quarter of 2005. In reaction to this news, the
price of ATI stock fell $1.58, or 10.3%, from its previous trading
day's closing price of $15.26 per share, to close at $13.68 on June 7,
2005. On June23, 2005, the Company revealed in a press release that
it had experienced a net loss of $400,000 in the third quarter 2005,
compared to a $49 million profit in the same period in 2004. In
addition, defendants slashed their guidance for the fourth quarter,
projecting revenues to be approximately $550-580 million, 10% lower
than previously projected, and that gross margins to be 29-30%,
approximately 5% lower than defendants' previous guidance of 34%. In
reaction to this news, the price of ATI stock declined even further,
falling $0.98, or 7.6%, to close at $11.80 on June 23, 2005. On the
same day, Smartmoney.com published an article stating that ATI's
disappointing results and lower guidance was due, in part, to the
Company's "difficulty in rolling out its new graphics processor, while
supercharged competitor Nvidia (NVDA) is already in full production
with its new high-end GeForce 7800 GTX processor. And as the topper,
ATI's sitting on a fat pile of inventory, some $456 million worth --
much more than the $255 million it had at the end of fiscal 2004."
Milberg Weiss Bershad & Schulman LLP (
http://www.milbergweiss.com)
is a firm with over 100 lawyers with offices in New York City, Los
Angeles, Boca Raton, Delaware, and Washington D.C. and is active in
major litigations pending in federal and state courts throughout the
United States. Milberg Weiss has taken a leading role in many
important actions on behalf of defrauded investors, consumers, and
others for nearly 40 years. Please contact the Milberg Weiss website
for more information about the firm. If you wish to discuss this
action with us, or have any questions concerning this notice or your
rights and interests with regard to the case, please contact the
following attorneys:
