Gateway hit with shareholder lawsuit
Claims it put out misleading results
A Gateway shareholder has filed a lawsuit against the company claiming that it misled investors about financial statements.
James Burton, a Houston based shareholder, filed the suit against the computer manufacturer last Thursday in a federal court in San Diego.
It alleges that Gateway failed to record the declining value of its investments in a number of startups, and reported false and misleading financial results for the three months ending in September. It also claims that despite indications to the contrary, Gateway insisted that retail market was strong.
Gateway has denied all the allegations and said it would defend itself "vigorously". The company maintains that its financial reports were consistent with what it believed at the time.
However, as well as accusing Gateway's founding chairman, Ted Waitt, and chief financial officer, John Todd, of knowing the third-quarter results issued 12 October were misleading, the suit claims that the company hid or destroyed documents that countered this view.
This is the latest of a string of investor lawsuits. Last month a group of investors sued Lucent Technologies, claiming it misled shareholders in October by reporting inflated earnings for the fiscal fourth quarter. ®