Nov. 16, 2001 — Microprocessor developer Transmeta Corp., Santa Clara, CA, is facing a class-action lawsuit filed on behalf of investors who bought the company’s common stock between Nov. 6 and Dec. 6, 2000.
The suit was filed on Nov. 13 in the US District Court, Southern District of NY. It alleges that the prospectus Transmeta filed with the Securities and Exchange Commission in connection with the company’s Nov. 6 IPO was “materially false and misleading.”
The prospectus, the lawsuit claims, failed to disclose that the underwriters had solicited and received “excessive and undisclosed commissions” from certain investors in exchange for which the underwriters allocated to those investors material portions of the restricted number of shares issued in connection with the IPO; and also that the underwriters had entered into agreements with customers in which they agreed to allocate Transmeta shares to those customers in exchange for which the customers agreed to purchase additional Transmeta shares in the aftermarket at pre-determined prices.
Judge Shira A. Scheindlin appointed the following firms to serve as the plaintiffs’ executive committee: Berstein Liebhard & Lifshitz, LLP, Milberg Weiss Bershad Hynes & Lerach LLP, Schiffrin & Barroway LLP, Sirota & Sirota LLP, Stull, Stull & Brody and Wolf Haldenstein Freeman Adler & Herz LLP.
The plaintiffs’ executive committee has been vested by the court to prosecute the IPO securities litigation.