This is a securities fraud class action lawsuit against UTStarcom, Inc. and certain directors and officers alleging that UTStarcom improperly backdated stock option grants to its officers and executives.
The class action lawsuit alleges that at all times during the Class Period, UTStarcom represented that the exercise price of all stock options would be no less than the fair market value of the UTStarcom's common stock, measured by the publicly traded closing price for UTStarcom stock on the day of the grant. However, in reality, options granted in 2002 were backdated so their exercise price correlated to a day on or near the day UTStarcom's stock hit a significantly low price for the year, or directly in advance of sharp increases in the price of UTStarcom stock.
The class action complaint further alleges that the truth regarding the Company's option granting practices was revealed on July 24, 2007. On that date, UTStarcom announced that a review of the Company's historical stock option grant practices uncovered evidence that stock option grants were backdated. As a result of these findings, the Company further announced that its previously issued financial statements for the years 2000 through 2006 should no longer be relied upon, and would be restated by at least $28 million. In response to this news, UTStarcom's share price fell 22%, from a close of $4.73 on July 23, 2007 to a close of $3.70 on July 25, 2007. The share price continued to decline thereafter.
Name (Stock Symbol)
UTStarcom, Inc. (UTSI)
UTStarcom, Inc. manufactures, integrates, and supports Internet Protocol (IP) based, end-to-end networking, and telecommunications solutions.
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