Professional class action plaintiffs have decided that even under the new law intended to stamp out frivolous suits, there are still grounds for a securities laws violation lawsuit wherever insiders sold any shares before the price tanks. Quantum Corp is being sued for allegedly artificially inflating its share price with over-optimistic claims about its Bigfoot disk drive. The shares, which were trading as high as about $26 on May 20, began to fall after Quantum revised its expectations regarding Bigfoot on June 12. On June 14, the price fell 14.2% to close at 15.875, has been as low as $10.875 and is now back around $15.625 – the kind of drop from their highs suffered by many high-tech stocks of late. Prior to the fall, the suit alleges, seven Quantum insiders sold more than 265,543 shares of their Quantum stock at artificially inflated prices as high as $25.625 for $6.5m in proceeds.
