Vitesse Slammed with Suit

Staff Reporter -- Electronic News, 6/2/2006

In another blow to the troubled company, shareholders of Vitesse Semiconductor Corp. have filed a class action suit against the company for alleged securities law violations. 

The suit claims that Vitesse misstated its finances, including its accounting for product returns and the dating of executive stock option grants.

It is alleged that as a result of Vitesse's backdating of stock options, the price of the company's stock was inflated, harming the investors involved.

The suit was filed on behalf of shareholders acquiring Vitesse's common stock between Jan. 28, 2003 and April 26 by Susman Godfrey L.L.P. in the U.S. District Court for the Central District of California.

Trouble has been brewing at Vitesse for some time; last month, the company's board fired its CEO, CFO and an executive VP and came under investigation by the SEC. 

But Vitesse isn't alone. Several companies have come under governmental scrutiny in recent weeks for stock option-related issues, including Altera, KLA-Tencor, Rambus and Broadcom.