Law firm Roy Jacobs & Associates has filed a class action lawsuit against Harris Stratex and certain officers and directors of the company, in the US District Court for the District of Delaware, on behalf of all purchasers of the securities of Harris Stratex Networks, from January 29, 2007 through July 30, 2008, including former shareholders of Stratex Networks, who exchanged their shares for shares of Harris Stratex Networks, in a merger completed in January 2007.
It is alleged in the complaint that on July 30, 2008, the company announced that it had discovered accounting errors which caused its previously issued financial statements to be incorrect.
According to the announcement, the company will restate its financial statements from 2005 through the present. The company reported these accounting errors will cut previously reported pre-tax income by $18 million to $25 million. As a result of the restatement, the company announced that its prior financial statements for the first three quarters of fiscal 2008 and the fiscal years 2005 through 2007 should no longer be relied upon. Harris Stratex’s share price fell in reaction to the announcement from $11.24 to $7.35 per share, a 34.61% decline in value, and has not recovered.