A judge in Superior Court in Alameda County, California, ruled in the plaintiffs' favor on four causes of action on August 22, deciding that there was enough evidence to move the case forward. The attorneys hope to certify the class in the suit by October, said Tracy L. Thrower, attorney with Stull, Stull & Brody in Los Angeles.
The case, filed in February, alleges that Cirrus directors and officers committed deceit and fraud, misrepresenting the financial health of the integration-product company to shareholders. The plaintiffs claim that between last October and February, the company omitted material information about its 32- and 64-bit products. When the company released weak quarterly results February 13, the stock dropped 64 percent to 19-5/8 in a single day, according to the lawsuit.
Cirrus officials did not return phone calls. The company did, however, issue a statement contending that the court ruled in their favor on some points.
"The court dismissed half of the plaintiffs' case with prejudice including all of the plaintiffs' claims under the California securities laws and...claims for breach of fiduciary duty," according to the statement.
In February, Cirrus said it expected to post lower-than-anticipated fourth-quarter revenues and a net loss. The company also said it would have to adjust its third-quarter results, posting a $3.6 million net loss, rather than profits of $9 million as reported earlier.
Cirrus attributed the adjustment to realizing that it had a $13.5 million inventory write-down for its PicoPower core logic product after announcing its third-quarter results but before filing its quarterly statement with regulators.