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Securities Sleuth: Misleading IPO Documents Hurt Netlist

Mark McNair
0 Comments|June 6, 2007

Netlist, Inc. Insiders Sell



Netlist, Inc. Insiders Sell

Netlist, Inc. (NASDAQ: NLST, BullBoards) had its Initial Public Offering on November 30, 2006.

It has been alleged that the Company was not forthcoming at the time of its IPO, andhat there was a failure to conduct an adequate due diligence investigation into the Company prior to the IPO. Specifically, it is alleged the Company failed to reveal prior to the IPO that it was already witnessing adverse effects of an oversaturated computer memory market. This was not disclosed despite the fact that defendants knew or should have known that the Company had no exit strategy that would allow it to minimize adverse market conditions. This lack of a plan was contrary to prior representations in road-show presentations to analysts and investors prior to the IPO. Nor did Netlist disclose these facts in media interviews following the IPO.

But eventually the true condition of the Company was revealed. On April 16, 2007, after the close of trading, Netlist disclosed that problems which existed at the time of the IPO would result in extremely disappointing results for the first quarter of 2007. Moreover, the Company admitted that it was performing well below guidance, its earnings would be almost 75% lower than previous forecasts, and that expenses were higher than expected.

Not surprisingly Netlist stock collapsed the next trading day. The stock dropped almost 30% on a huge volume.

This was devastating news for shareholders, who were stunned by the announcement. However, before the bad news was revealed Company insiders liquidated over $6.5 million of their shares. We are investigating this matter and if you are an affected investor you may wish to contact us to discuss your options.

Trouble for Sterling Financial Corp Investors

Investors of Sterling Financial Corp (NASDAQ: SLFI, BullBoards) have been stunned by two announcements.

First, on April 30, 2007, the Company announced that it expected to restate its previously issued financial statements including Fiscal Year 2006 in connection with certain accounting irregularities at its EFI wholly owned subsidiary. At the same time, Sterling announced that EFI's CEO and President had voluntarily relinquished his positions. After this announcement Sterling's stock dropped nearly 20%.

Subsequently, on May 24, 2007, Sterling announced the preliminary results from its ongoing investigation. It is alleged that the investigation revealed evidence of a sophisticated loan scheme, orchestrated deliberately by certain EFI officers andemployees over an extended period of time to conceal credit delinquencies, falsifyfinancing contracts and related documents, and subvert established internal controls established by Sterling. Following this announcement, Sterling's stock fell almost 40% on May 25.

Investors who purchased Sterling Financial between April 24, 2004 and May 24, 2007 are affected. If you are affected investor you may wish to contact us to discuss your options


Mark McNair is an attorney in private practice who represents investors in securities litigation and was formerly an attorney at the Securities and Exchange Commission. For additional information, go to securitiessleuth.com


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