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Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Finisar Corporation

^{Published on 2011-03-15 13:50:33 - Market Wire}
 

SAN DIEGO--([ BUSINESS WIRE ])--Robbins Geller Rudman & Dowd LLP (aRobbins Gellera) ([ http://www.rgrdlaw.com/cases/finisar/ ]) today announced that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of Finisar Corporation (aFinisara) (NASDAQ:FNSR) common stock during the period between December 2, 2010 and March 8, 2011 (the aClass Perioda).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffa™s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at [ djr@rgrdlaw.com ]. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at [ http://www.rgrdlaw.com/cases/finisar/ ]. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Finisar and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Finisar is a provider of optical subsystems and components that connect short-distance local area networks, storage area networks, longer distance metropolitan area networks, fiber-to-the-home networks, cable television networks and wide area networks.

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Companya™s business and financial results. Specifically, defendants failed to disclose that Finisara™s recent revenue growth was due to an oversupply of inventory in the market and that the Company would be unable to sustain its strong growth due to increased pricing pressures and a slowdown in business from China. As a result of defendantsa™ false statements, Finisara™s stock traded at artificially inflated prices during the Class Period, reaching a high of $43.23 per share on February 14, 2011.

Then, on March 8, 2011, after the market closed, Finisar issued a press release announcing its third quarter fiscal year 2011 results. The Company reported earnings of $18.8 million, or $0.22 diluted earnings per share, and revenue of $263.0 million. The Company further reported its fourth quarter 2011 revenues would be in the range of $235 to $250 million, lower than analystsa™ estimates. On this news, Finisara™s stock fell $15.43 per share to close at $24.61 per share on March 9, 2011, a one-day decline of nearly 39%.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) Finisara™s recent revenue surge was not due solely to organic growth from real end-market demand, but rather it was partially due to an inventory build by the Companya™s customers; (b) Finisar was experiencing increasing pricing pressures due to intense competition in the industry and, as a result, it was forced to concede to steep discounts in order to retain certain of its customers; (c) Finisar was experiencing a serious slowdown in business from China, which would have a detrimental effect on the Companya™s ability to continue growing at unprecedented rates; and (d) Finisar failed to disclose known trends and uncertainties as required by SEC regulations concerning its revenue growth rate.

Plaintiff seeks to recover damages on behalf of all purchasers of Finisar common stock during the Class Period (the aClassa). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site ([ http://www.rgrdlaw.com ]) has more information about the firm.