UNITED STATES DISTRICT COURT
DISTRICT OF EASTERN DISTRICT OF NEW YORK
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WILLIAM SMITH, Individually and On Behalf of : Case No.
All Others Similarly Situated, :
:
Plaintiff, : CLASS ACTION
: COMPLAINT FOR
- against - : VIOLATION OF
: FEDERAL
NORTEL NETWORKS CORPORATION, JOHN A. : LAW
ROTH, WILLIAM F. CONNOR, CHAHRAM :
BOLOURI and FRANK DUNN, : Jury Trial Demanded
Defendants.
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Plaintiff individually and on behalf of all others similarly situated, by his
undersigned attorneys, for their Class Action Complaint, allege upon personal knowledge as to
himself and his own acts, and upon information and belief as to all other matters, based upon,
inter alia, the investigation made by and through their attorneys, which investigation included,
among other things, a review of the public documents and new releases of Nortel Networks
Corporation ("Nortel" or the "Company")
NATURE OF THE ACTION
1. This is a class action on behalf of all purchasers of the common stock of Nortel
Networks Corporation ("Nortel" or the "Company") who purchased or otherwise acquired such
stock between November 1, 2000 and February 15, 2001, inclusive ("the Class Period"), to
recover for injuries suffered from defendants' violations of the federal securities laws. During
the Class Period, defendants issued to the investing public materially false and misleading
financial information concerning the Company's publicly reported revenues and earnings.
2. During the Class Period, Nortel touted strong revenue and earnings guidance for
first quarter and fiscal year 2001. All along, however, Nortel executives knew that it was
experiencing a substantial shortfall in sales and earnings due to decreased orders from its
SNIPPETS:
undersigned attorneys, for their Class Action Complaint, allege upon personal knowledge as to
inter alia, the investigation made by and through their attorneys, which investigation
a review of the public documents and new releases of Nortel Networks
recover for injuries suffered from defendants' violations of the federal securities laws.
financial information concerning the Company's publicly reported revenues and earnings.
As a direct result, the price of Nortel's stock plummeted 33% to close at $20.02 on February
2001 erasing nearly $33 billion in market capitalization.
During the Class Period, but before the devastating announcement on February
This action arises under sections 10and 20of the Securities Exchange Act
including the dissemination of materially false and misleading statements to the
Plaintiff, William Smith, purchased Nortel stock at artificially inflated prices
fraud and deceit upon plaintiff and the other members of the Class.
Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
Some 3.06 billion shares of Nortel common stock are outstanding in an activelytraded and
Nortel Networks Confirms Guidance for 2000 and 2001,
Defendant Roth was quoted as stating:
on a fully diluted basis respectively.
we continue to expect the overall market
material facts when made in that the Defendants knew, or recklessly disregarded, that the
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