It is alleged in the complaint that on July 30, 2008, the company announced that it had discovered accounting errors which caused its previously issued financial statements to be incorrect.
According to the announcement, the company will restate its financial statements from 2005 through the present. The company reported these accounting errors will cut previously reported pre-tax income by $18 million to $25 million. As a result of the restatement, the company announced that its prior financial statements for the first three quarters of fiscal 2008 and the fiscal years 2005 through 2007 should no longer be relied upon. Harris Stratex’s share price fell in reaction to the announcement from $11.24 to $7.35 per share, a 34.61% decline in value, and has not recovered.
