Securities Newsroom

Spector, Roseman & Kodroff, P.C. Announces the Filing of a Class Action Suit Against Sipex Corporation

PHILADELPHIA, Feb. 24 The law firm of Spector, Roseman & Kodroff, P.C. announces that a securities class action lawsuit was commenced in the United States District Court for the Northern District of California, on behalf of purchasers of the common stock of Sipex Corporation ("Sipex" or the "Company") (Nasdaq: SIPX - News) between April 11, 2003 through January 20, 2005, inclusive (the "Class Period").
 
The Complaint alleges that defendants violated the federal securities laws by issuing materially false and misleading statements contained in press releases and filings with the Securities and Exchange Commission during the Class Period. Specifically, the Complaint names as defendants Sipex, Walid Maghribi (former President and Chief Executive Officer), Phil Kagel (former Chief Financial Officer), and Ray Wallin (current Chief Financial Officer). According to the Complaint, defendants violated sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period.

Sipex designs, manufactures and markets high-performance semiconductors that are used by original equipment manufacturers operating in the computing, consumer electronics, communications and networking infrastructure markets. Throughout the Class Period, Sipex reported positive results in SEC filings and publicly disseminated press releases. Defendants attributed these results to increased semiconductor sales and cost savings resulting from a restructuring of its operations. The Complaint alleges, however, that unbeknownst to the Class, the Company's seeming success was the result of improper accounting that artificially inflated Sipex's reported results.

The Complaint further alleges that the truth began to emerge on January 20, 2005 when, after the market closed, Sipex issued a press release announcing that it might need to restate its reported financial statements for fiscal 2003, and for the first three quarters of fiscal 2004. The Company stated that it had discovered "improper recognition of revenue during these periods on sales for which price protection, stock rotation and/or return rights may have been granted," and that the Company's audit committee and board of directors had commenced an internal investigation of the matter. As a result of the investigation, Sipex stated that it would not be able to file its 2004 annual report with the SEC on time. In reaction to this news, the price of Sipex common stock dropped on unusually high volume, falling from $0.90 per share, or 23%, from its previous trading day's closing price of $3.84, to close at $2.94 on January 21, 2005.

If you purchased Sipex securities during the Class Period, you may, no later than March 25, 2005, move to be appointed as a Lead Plaintiff in this class action. A Lead Plaintiff is a representative, chosen by the Court, that acts on behalf of other class members in directing the litigation. The Private Securities Litigation Reform Act of 1995 directs Courts to assume that the class member(s) with the "largest financial interest" in the outcome of the case will best serve the class in this capacity. Courts have discretion in determining which class member(s) have the "largest financial interest," and have appointed Lead Plaintiffs with substantial losses in both absolute terms and as a percentage of their net worth.

If you have sustained substantial losses in Sipex securities during the Class Period, please contact Spector, Roseman & Kodroff, P.C.  for a more thorough explanation of the Lead Plaintiff selection process. If you have relatively small losses, your ability to participate in any recovery will be protected by the Lead Plaintiff(s), and you need take no affirmative steps at this time.

Spector, Roseman & Kodroff, P.C., located in Philadelphia, Pennsylvania, concentrates its practice in complex litigation including actions dealing with securities laws, antitrust, contract and commercial claims. The firm is active in major litigation pending in federal and state courts throughout the United States. The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm as lead counsel in numerous major class actions involving violations of the federal securities laws and the federal antitrust laws, and consumer fraud. As a result of the efforts of the firm, and its members, hundreds of millions of dollars have been recovered through judgments and settlements on behalf of thousands of defrauded shareholders and companies.