SOURCE: Milberg LLP

December 14, 2009 12:23 ET

Milberg LLP Announces the Filing of a Securities Class Action Lawsuit Against STEC, Inc. -- (NASDAQ: STEC)

NEW YORK, NY--(Marketwire - December 14, 2009) - The law firm of Milberg LLP has filed a securities class action lawsuit in the United States District Court for the Central District of California on behalf of purchasers of STEC, Inc. ("STEC" or the "Company") (NASDAQ: STEC) common stock during the period between June 16, 2009 and November 3, 2009 (the "Class Period"). STEC is a Santa Ana, California-based leading global provider of solid state technologies and solutions tailored to meet the high-performance, high reliability needs of original equipment manufacturers ("OEMs"). The action is captioned Weinberger v. STEC, Inc., et al., and is numbered 09-1460. The complaint can be obtained from the court or viewed on Milberg LLP's website www.milberg.com.

The complaint, filed on December 11, 2009, charges STEC and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Securities Exchange Commission Rule 10b-5.

According to the complaint, during the Class Period, defendants represented that STEC was effectively growing its business and that the growth would continue. Such statements presented the Company's historical results, its customers, its competitive position and its prospects, in a very favorable light, causing the Company's stock to trade at inflated levels. Such statements were materially false and misleading because, contrary to the picture painted by defendants and assurances to investors that STEC had no competition at that stage, the Company was facing looming threats of competition from other high technology companies. Defendants further assured investors that enterprise end users were quickly adopting solid state drive ("SSD") devices over traditional hard disk drive ("HDD") devices. The complaint alleges that as a result of defendants' false and misleading statements, STEC stock traded at artificially inflated prices during the Class Period, reaching a high of $41.84 per share on September 10, 2009. This inflated stock price permitted top STEC officers/directors to sell 9 million shares of their STEC stock at inflated prices in a secondary stock offering in August 2009.

On November 3, 2009, STEC shocked investors when it reported its third quarter 2009 financial results and its fourth quarter 2009 outlook, announcing an inventory warning that one of its customers would carry 2009 inventory into 2010, impacting the Company's first quarter 2010. STEC identified the customer as EMC Corporation, a company which accounts for 90% of the Company's Zeus IOPS SSD business. On this news, STEC's stock plummeted $9.01 per share to close at $14.14 per share on November 4, 2009, a one-day decline of over 38%, on unusually high volume of more than 31.9 million shares.

If you purchased securities of STEC from June 16, 2009 through November 3, 2009, you may move the court no later than January 5, 2010, and request that the court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the court must decide that your claim is typical of the claims of other class members, and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by the decision whether or not to serve as a lead plaintiff. You can recover as an absent class member without moving for lead plaintiff. You may retain Milberg LLP, or other attorneys, to serve as your counsel in this action.

The complaint has been filed as a class action on behalf of all persons who own STEC common stock. No class has yet been certified, and there can be no guarantee that a class will be certified.

About Milberg

Milberg LLP has been representing individual and institutional investors for over 40 years and serves as lead counsel in federal and state courts throughout the United States. Please visit the Milberg website (http://www.milberg.com) for more information about the firm.

Contact Information

  • If you have any questions you may contact the attorneys listed below:

    Milberg LLP (New York)
    Andrei Rado, Esq.
    Anne Marie Vu, Esq.
    One Pennsylvania Plaza, 49th Floor
    New York, NY 10119

    Milberg LLP (California)
    Jeff Westerman, Esq.
    Sabrina S. Kim, Esq.
    300 South Grand Avenue, Suite 3900
    Los Angeles, CA 90071

    Phone number: (800) 320-5081
    Email: contactus@milberg.com

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