*** Legal
GT Interactive Inflated Income, Lawsuit Alleges
(February 10)
For well over a year, GT Interactive Software Corp.
inflated its reported income by violating accounting
rules, according to allegations in a class action
complaint filed in Manhattan, in the U.S. District
Court for the Southern District of New York. The
Docket Number is 98 Civ. 0921. As a result, the
complaint alleges that purchasers of GTIS securities
were induced by fraud to pay too much for their
shares. The complaint alleges violations of the
federal securities laws on behalf of GTIS securities
purchasers during the period Aug. 1, 1996 through
Dec. 12, 1997.
The complaint alleges that GTIS and certain of its
top officers,
CEO Ronald Chaimowitz
Chairman Joseph J. Cayre,
CFO Andrew Gregor,
improperly capitalized research and development
expenses for projects that were discontinued or for
which technological feasibility had not been
achieved. In addition, the complaint charges that
defendants failed to write off impaired assets. The
effect of these improper practices, according to the
complaint, was to artificially inflate GTIS' reported
earnings and the price of its securities. During the
period of this artificial inflation, defendants
Chaimowitz and Cayre are alleged to have sold large
amounts of shares from their personal portfolios.
If you purchased GTIS securities during the class
period of Aug. 1, 1996 through Dec. 12, 1997, you may
move the Court to serve as lead counsel to the class
no later than March 19, 1998. Plaintiff, Reuben
Advani, who purchased 1300 shares of GTIS common
stock during the class period, seeks to recover the
out-of-pocket losses suffered by the members of the
class.
Plaintiff has retained as counsel the law firms of
Berger & Montague, P.C., The Olsen Law Firm, and Levy
and Levy. Berger & Montague, P.C. has recovered over
a billion dollars for shareholders over the last 24
years. The firm has won wide recognition by the
Courts for the high quality of its representation of
defrauded investors, as well as for its expertise in
complex securities, antitrust, environmental, and
consumer protection class actions.
www.bm.net/home
Subsidiary of Imax Files Against Simulation
Attraction Provider
(February 6)
Iwerks Entertainment Inc. has been served with a
complaint filed in the U.S. District Court of New
York by Ridefilm Corp., a subsidiary of Imax Corp.,
alleging that its merger with Showscan Entertainment
is in violation of the Sherman and Clayton Anti-trust
Acts.
The company, upon review of the complaint, says that
it believes that the suit is without merit and that
it intends to vigorously defend itself.
www.iwerks.com
3Dlabs Sues Texas Instruments for Misappropriation of
Trade Secrets
(February 10)
3Dlabs Inc. Ltd. filed a lawsuit in the Superior
Court of California, County of Santa Clara, charging
Texas Instruments (TI) with breach of contract and
misappropriation of trade secrets belonging to
3Dlabs. Specifically, 3Dlabs claims that, in breach
of the parties' written license agreements and in
violation of the trade secret provisions of the
California Civil Code, TI
posted certain confidential and proprietary
information belonging to 3Dlabs on the World
Wide Web
made and distributed thousands of printed copies
of certain confidential and proprietary
information
belonging to 3Dlabs.
3Dlabs alleges that TI violated other provisions of
the agreements between the companies and seeks
declaratory relief with respect to certain
contractual disagreements between the parties.
Court Enters Injunction Against Sega
(January 27)
3Dfx Interactive, Inc. announced that on January 9,
1998, the Superior Court for Santa Clara County
entered an injunction ordering Sega to return to 3Dfx
Interactive, and prohibiting Sega from using or
disclosing, 3Dfx Interactive trade secrets and
confidential information, which Sega terminated in
July 1997. 3Dfx Interactive filed suit against Sega
Enterprises, Ltd. and Sega of America, as well as NEC
Corporation and VideoLogic Group, Plc. for claims
arising out of Sega’s termination of the agreement to
use 3Dfx’s chipset in Sega’s next generation video
game console.
www.3dfx.com
Wave Issue 9739 3/18/98 Article 7-01