NEW YORK, Feb. 16, 2005 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of Silicon Storage Technology, Inc. ("Silicon Storage" or the "Company") (Nasdaq:SSTI) from March 22, 2004 to December 20, 2004, both dates inclusive (the "Class Period").
The action, entitled DiCinto v. Silicon Storage Technology, Inc., et al., Case No. (not yet assigned), is pending in the United States District Court for the Northern District of California, and names as defendants, the Company, its Chairman, President and Chief Executive Officer, Bing Yeh, its Chief Operating Officer, Yaw Wen Hu, and its Company's Chief Financial Officer, Jack K. Lai. A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder. More specifically, the complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the demand for the Company's products was materially declining; (2) that the Company's margins were being significantly eroded due to excess inventory that were in the channels; (3) that the Company was experiencing greater competition across all segments of business, which led to significant decreases in the prices of Silicon Storage's products and also caused a significant erosion of the Company's margins; (4) that as a result of the above, the Company's revenue and earnings were materially decreasing; and (5) that the defendants' positive statements concerning the Company were lacking in any reasonable basis when made.
On December 20, 2004, after the market closed, Silicon Storage announced today that its revenue in the fourth quarter was expected to be between $102 and $108 million versus previous guidance of $120 to $130 million. News of this shocked the market. The following day, shares of Silicon Storage fell $1.02 per share, or 14.55 percent, to close at $5.99 per share (down from $7.01 per share on December 20, 2004) on unusually heavy trading volume.
If you are a member of the class described above, you may, not later than March 22, 2005, move the Court to serve as lead plaintiff of the class, if you so choose. 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 Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action.
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. 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:
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca