<p>The original complaint charges defendants with violations of federal securities laws by, among other things, issuing a series of materially false and misleading press releases and SEC filings regarding Luminent’s financial results and business prospects. Specifically, the complaint alleges that Luminent failed to disclose: (i) the Company was not sufficiently liquid; (ii) the Company’s financial statements and reports were not prepared in accordance with GAAP and SEC rules; and (iii) that defendants lacked any reasonable basis to claim that the Company had ample liquidity and that the dividend payments were secure. As a result, the price of the Company’s common stock was artificially inflated throughout the Class Period. On August 6, 2007, however, defendants shocked the market when they announced that the Company was cancelling the payment of its dividend. In response to the announcement, Luminent’s share price dropped to a low of $3.75 on August 6, 2007 before trading was halted. It then opened on August 7, 2007 at $0.50, representing a drop of over 85%.</p>