Cisco Faces Shareholder Lawsuit

Scott & Scott, LLC Files Case on Behalf of Shareholders



Apr 24, 2001, 01:00 ET from Scott & Scott, LLC

    COLCHESTER, Conn., April 24 /PRNewswire Interactive News Release/ --
 Scott & Scott, LLC ( scottlaw@scott-scott.com ), a Connecticut-based law firm,
 filed a class action in the United States District Court for the Northern
 District of California on behalf of purchasers of Cisco Systems, Inc.
 ("Cisco") (Nasdaq:   CSCO) common stock during the period between August 10,
 1999 and February 6, 2001 (the "Class Period").
     The complaint charges Cisco and certain of its officers and directors with
 violations of the Securities Exchange Act of 1934.  Cisco and its subsidiaries
 are engaged in selling products for networking in the Internet.  The complaint
 alleges that by the beginning of the Class Period in August 1999, Internet
 Service Providers and competitive local telephone companies had technology to
 deploy, but they had little capital, and Cisco used this as an opportunity to
 increase its sales by providing capital financing to such companies.  Cisco,
 however, made such financing conditional upon the purchase of large amounts of
 Cisco product.  Through this alleged manipulation and the shipment of
 defective or incomplete product, as well as Cisco's failure to adequately
 accrue for excess and overvalued inventory and uncollectible finance
 receivables, Cisco was able to report "record" earnings each quarter during
 the Class Period.  Defendants thus made positive but false statements about
 Cisco's products, financial results and business during the Class Period.  As
 a result, Cisco's stock traded as high as $82.
     The inflation in Cisco's stock price was essential to its main corporate
 strategy, that of growth through acquisition, which Cisco accomplished through
 the exchange of inflated Cisco shares.  In addition, each of the defendants
 had the motive and the opportunity to perpetrate the fraudulent scheme and
 course of business described herein in order to sell $595 million worth of
 their own Cisco shares at prices as high as $80.24 per share, or 84% higher
 than the price to which Cisco shares dropped after the end of the Class
 Period, as the true state of Cisco's business and prospects began to reach the
 market.
     After completing more than 20 major acquisitions between 9/99 and 2/01, by
 issuing more than 400 million shares of Cisco stock, and selling more than
 10 million shares of their personal Cisco holdings, on 2/6/01, Cisco announced
 extremely disappointing 2nd Quarter Fiscal 2001 results, including EPS of only
 $0.18.  This disclosure shocked the market, causing Cisco's stock to decline
 to less than $30 per share before closing at $31-1/16 per share on 2/7/01, on
 record volume of more than 279 million shares, inflicting billions of dollars
 of damage on plaintiff and the Class.  Cisco later admitted that 3rd Quarter
 Fiscal 2001 sales would be less than $4.8 billion, or lower than any quarter
 since the 2nd Quarter Fiscal 2000.  Defendants' misconduct has wiped out over
 $400 billion in market capitalization as Cisco stock has fallen 84% from its
 Class Period high of $82 per share as the truth about Cisco, its operations
 and prospects began to reach the market.  On 4/16/01, Cisco announced a
 $2.5 billion write-down of inventory (or 90% of its inventory as of 1/31/01)
 of components in its service business.  This was one of the largest inventory
 write-downs in U.S. history.  Cisco stock has dropped to as low as $13-3/16.
     If you wish to serve as lead plaintiff, you must move to do so before this
 court within sixty days of April 20, 2001.  If you wish to discuss this action
 or your rights regarding it, please contact David R. Scott or Neil Rothstein
 at 800-404-7770 or e-mail at nrothstein@scott-scott.com .
     Scott & Scott, LLC is a Connecticut based law firm engaged in the
 representation of public and private companies, institutions, funds,
 individuals and other entities in complex litigation, transactions and trials.
 The firm's nationwide practice in areas of securities, antitrust and consumer
 matters is founded upon its ongoing dedication to client satisfaction and
 communication.  The firm's attorneys litigate in both federal and state courts
 throughout the nation on cases for clients worldwide.
     If you would like to obtain more information about this cases and would
 like to discuss the matter above with an attorney, please contact: David R.
 Scott or Neil Rothstein at 800-404-7770 or e-mail at scottlaw@scott-scott.com.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X25522755
 
 

SOURCE Scott & Scott, LLC
    COLCHESTER, Conn., April 24 /PRNewswire Interactive News Release/ --
 Scott & Scott, LLC ( scottlaw@scott-scott.com ), a Connecticut-based law firm,
 filed a class action in the United States District Court for the Northern
 District of California on behalf of purchasers of Cisco Systems, Inc.
 ("Cisco") (Nasdaq:   CSCO) common stock during the period between August 10,
 1999 and February 6, 2001 (the "Class Period").
     The complaint charges Cisco and certain of its officers and directors with
 violations of the Securities Exchange Act of 1934.  Cisco and its subsidiaries
 are engaged in selling products for networking in the Internet.  The complaint
 alleges that by the beginning of the Class Period in August 1999, Internet
 Service Providers and competitive local telephone companies had technology to
 deploy, but they had little capital, and Cisco used this as an opportunity to
 increase its sales by providing capital financing to such companies.  Cisco,
 however, made such financing conditional upon the purchase of large amounts of
 Cisco product.  Through this alleged manipulation and the shipment of
 defective or incomplete product, as well as Cisco's failure to adequately
 accrue for excess and overvalued inventory and uncollectible finance
 receivables, Cisco was able to report "record" earnings each quarter during
 the Class Period.  Defendants thus made positive but false statements about
 Cisco's products, financial results and business during the Class Period.  As
 a result, Cisco's stock traded as high as $82.
     The inflation in Cisco's stock price was essential to its main corporate
 strategy, that of growth through acquisition, which Cisco accomplished through
 the exchange of inflated Cisco shares.  In addition, each of the defendants
 had the motive and the opportunity to perpetrate the fraudulent scheme and
 course of business described herein in order to sell $595 million worth of
 their own Cisco shares at prices as high as $80.24 per share, or 84% higher
 than the price to which Cisco shares dropped after the end of the Class
 Period, as the true state of Cisco's business and prospects began to reach the
 market.
     After completing more than 20 major acquisitions between 9/99 and 2/01, by
 issuing more than 400 million shares of Cisco stock, and selling more than
 10 million shares of their personal Cisco holdings, on 2/6/01, Cisco announced
 extremely disappointing 2nd Quarter Fiscal 2001 results, including EPS of only
 $0.18.  This disclosure shocked the market, causing Cisco's stock to decline
 to less than $30 per share before closing at $31-1/16 per share on 2/7/01, on
 record volume of more than 279 million shares, inflicting billions of dollars
 of damage on plaintiff and the Class.  Cisco later admitted that 3rd Quarter
 Fiscal 2001 sales would be less than $4.8 billion, or lower than any quarter
 since the 2nd Quarter Fiscal 2000.  Defendants' misconduct has wiped out over
 $400 billion in market capitalization as Cisco stock has fallen 84% from its
 Class Period high of $82 per share as the truth about Cisco, its operations
 and prospects began to reach the market.  On 4/16/01, Cisco announced a
 $2.5 billion write-down of inventory (or 90% of its inventory as of 1/31/01)
 of components in its service business.  This was one of the largest inventory
 write-downs in U.S. history.  Cisco stock has dropped to as low as $13-3/16.
     If you wish to serve as lead plaintiff, you must move to do so before this
 court within sixty days of April 20, 2001.  If you wish to discuss this action
 or your rights regarding it, please contact David R. Scott or Neil Rothstein
 at 800-404-7770 or e-mail at nrothstein@scott-scott.com .
     Scott & Scott, LLC is a Connecticut based law firm engaged in the
 representation of public and private companies, institutions, funds,
 individuals and other entities in complex litigation, transactions and trials.
 The firm's nationwide practice in areas of securities, antitrust and consumer
 matters is founded upon its ongoing dedication to client satisfaction and
 communication.  The firm's attorneys litigate in both federal and state courts
 throughout the nation on cases for clients worldwide.
     If you would like to obtain more information about this cases and would
 like to discuss the matter above with an attorney, please contact: David R.
 Scott or Neil Rothstein at 800-404-7770 or e-mail at scottlaw@scott-scott.com.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X25522755
 
 SOURCE  Scott & Scott, LLC