PHILADELPHIA, April 19, 2001 (PRIMEZONE) -- The law firm of Spector, Roseman & Kodroff, P.C. announces that a class action lawsuit has been commenced in the United States District Court for the Northern District of Ohio against defendants Keithley Instruments, Inc. ("Keithley" or the "Company") (NYSE:KEI), and Joseph P. Keithley, Chairman, President, and Chief Executive Officer, on behalf of purchasers of the stock of Keithley during the period from January 18, 2001 through March 9, 2001, inclusive, (the "Class Period").
The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period regarding the demand for the Company's products and its expected revenues. Specifically, defendants stated that they anticipated that second quarter revenues would exceed those of the first quarter, in part, because of strong demand for the Company's products and the Company's record backlog. As alleged in the complaint, these statements were false and misleading when made because defendants knew that Keithley was suffering from reduced new equipment orders, delays in scheduled deliveries and, with respect to semiconductor customers, canceled orders, all of which would lead to reduced sales and earnings in the second quarter of 2001. As further alleged in the complaint, defendants' statements that Keithley's backlog was sufficiently large to overcome any softness in the economy and would lead to increased sales and earnings for the second quarter of 2001 were also materially false and misleading because defendants knew but did not disclose that the backlog was not a true measure of sales revenue because the backlog was subject to cancellation or delayed shipment at the "buyer's" discretion.
Finally, on March 12, 2001, before the market opened for trading, defendants issued a press release announcing that sales and earnings for the first quarter of 2001 would be less than expected and 25% below the sales levels of the first quarter of 2001. The market's reaction to this announcement was immediate and punitive. Shares of Keithley stock closed on Monday, March 12, 2001, at $14.95, from a previous close on Friday, March 9, 2001, of $20.76, on reported volume of approximately 2.2 million shares. Prior to this disclosure, defendant J. Keithley sold shares of Keithley stock for proceeds of approximately $3.2 million, while other insiders sold shares for proceeds in excess of $5 million.
If you purchased Keithley securities during the Class Period, you may, no later than May 25 , 2001, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth. If you have sustained substantial losses in Keithley securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C. at classaction@spectorandroseman.com for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel Robert M. Roseman toll-free at 888-844-5862 or via E-mail at classaction@spectorandroseman.com. For more detailed information about the firm please visit its Website at http://www.spectorandroseman.com.
Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania and San Diego, California, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered on behalf of thousands of defrauded shareholders and companies.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.