G> ,( ; 1 Laurence D. King (SBN 206423) p J lking_(a),kaplanfox.com 2 KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street, Suite 400 c ^ ,i^ 3 San Francisco , CA 94104 rte Telephone : 415-772-4700 ^l^F FJ^f^ 4 Facsimile : 415-772-4707
5 Local Counsel for Plaintiff
6 Karen H. Riebel [email protected] 7 Elizabeth R. Odette [email protected] 8 LOCKRIDGE GRINDAL NAUEN, P.L.L.P 9 100 Washington Avenue, Suite 2200 Minneapolis, MN 55402 10 Telephone.: 612-339-6900 a Facsimile: 612-339-0981 11 11 Additional Attorneys on signature page 12 13 UNITED STATES DISTRICT COURT *4,P ^ 14 NORTHERN DISTRICT OF CALIFORNIA 15 EUGENE L. HAMMER, on behalf of himself 16 and all others similarly situated, )^ a 17 CL SS AC `IO Plaintiff, N 18 CLASS ACTION COMPLAINT FOR vs. VIOLATIONS OF THE FEDERAL 19 SECURITIES LAWS BIGBAND NETWORKS, INC., AMIR 20 BASSAN-ESKENAZI, FREDERICK A. 21 BALL, RAN OZ, LLOYD CARNEY, DEAN GILBERT, KEN GOLDMAN, GAL 22 ISRAELY, BRUCE SACHS, ROBERT JURY TRIAL DEMANDED SACHS, and GEOFFREY YANG, 23 Defendants. 24
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26
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28 CLASS ACTION COMPLAINT 1 Plaintiff, Eugene L. Hammer ("Plaintiff'), individually and on behalf of all other persons
2 similarly situated, alleges the following based upon personal knowledge as to Plaintiff and Plaintiffs'
3 own acts, and upon information and belief as to all other matters, based on, inter alia, the
4 investigation conducted by and through Plaintiff's counsel, which included, among other things: a
5 review of the Defendants' public documents, conference calls and announcements made by
6 Defendants; United States Securities and Exchange Commission (the "SEC") filings by BigBand
7 Networks Inc. ("BigBand" or the "Company") and its related entities; wire and press releases
8 published by and regarding BigBand; securities analysts' reports and advisories about the Company;
9 and information readily obtainable on the Internet.
10 NATURE OF THE ACTIONS
11 1. This is a federal class action brought by Plaintiff on behalf of all purchasers of Bi
12 common stock between March 14, 2007, and September 27, 2007, (the "Class Period") against BigBE
13 and certain of its officers and directors ("Defendants"). Purchasers include those who purcha:
14 BigBand common stock pursuant or traceable to the Company's amended registration statement gig
15 effect on March 14, 2007 ("Registration Statement") through a Form S-1 SEC filing, and the prospec
16 dated March 14, 2007, (individually and collectively with the Registration Statement, the "Prospectu
17 issued in connection with the Company's initial public offering on or about March 14, 2007, (
18 "Offering" or the "IPO"). Plaintiff seeks to pursue remedies under the Securities Act of 1933 (
19 "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act").
20 2. BigBand develops, markets, and sells broadband multimedia infrastructure for
21 voice and data enabling cable operators and telephone companies to offer voice, video and data servi
22 across coaxial fiber and copper networks . BigBand is incorporated in Delaware and headquartered
23 Redwood City, California. The Company has research and development facilities in Westborou€
24 Massachusetts, Tel Aviv, Israel and Redwood City, California.
25 3. On March 14, 2007, BigBand and Company insiders completed an IPO, selling 7
26 million shares of BigBand common stock from the Company and 4.8 million shares of
27
28 1 CLASS ACTION COMPLAINT 1I common stock from selling stockholders, for a total of 12.3 million shares at $13 per share for
21 proceeds totaling $159.9 million.
3 4. During the Class Period, however, Defendants made false and misleading
4 regarding the Company's business prospects, financial results and forward guidance. Defendants faile
5 to disclose that the Company had achieved revenue growth and profitability at the end of 2006 only as
6 result of non-recurring orders from Verizon Communications Inc. ("Verizon"). As a result, BigBar
7 would not achieve further revenue growth from Verizon until Verizon worked off the inventor
8 purchased in late 2006 and early 2007. Rather, Defendants stated that BigBand would achiei
9 aggressive revenue and profit projections, misrepresenting and omitting the truth with regard I
10 Verizon's need to deplete its excess inventory. BigBand also failed to disclose that delays wei
11 occurring in the customization of certain customer specific products involving switched digital vide
12 ("SDV") technology. The viability of the Company's cable modem termination system ("CMTS") w,
13 also in doubt. Not only were these problems contributing to its failure to achieve revenue and pros
14 projections, they caused the Company to lack an objectively reasonable basis to make busine
15 projections and forward guidance during the Class Period.
16 5. After the market closed on September 27, 2007, the Company, through a press
17 revealed the truth of its product development problems. BigBand announced that it was revising i
18 revenue outlook for the third quarter ending September 30, 2007. The Company revealed that it no
19 expected to report revenue for the third quarter in the range of $35 million to $39 million, as much
20 $23 million below the Company's previous guidance of $54 million to $58 million. BigBand attribute
21 the dramatic decline in expectations to one customer, not named but assumed to be Verizon, havir
22 excessive inventory of BigBand's products and with no expectation to increase its purchases in tl
23 immediate future. The press release also revealed that BigBand was having difficulty obtainir
24 customer acceptance of other products necessary for revenue recognition. BigBand stated that all the;
25 issues were expected to persist for a number of quarters.
26 6. On this news, shares ofthe Company's stock fell nearly $2.67 per share, or 29.4
27 to close, on September 28, 2007, at $6.40 per share. 2 28 CLASS ACTION COMPLAINT 1 JURISDICATION AND VENUE
2 7. The claims asserted herein arise under, and pursuant to Sections 11 and 15 of
3 Securities Act [15 U.S.C. §§ 77k and 77o] and Sections 10(b) and 20(a) ofthe Exchange Act, [15 U.S.
4 §§ 78j(b) and 78t(a)], and Rule IOb-5 promulgated thereunder [17 C.F.R. § 240.1Ob-5].
5 8. This Court has jurisdiction over the subject matter ofthis action pursuant to Section 22
6 the Securities Act [15 U.S.C. § 77v], Section 27 ofthe Exchange Act [15 U. S.C. § 78aa] and 28 U.S.C
7 1331.
8 9. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act, [1
9 U.S.C. § 78aa] and 28 U.S.C. § 1391(b). BigBand maintains its corporate offices in this District ar
10 many of the acts and transactions alleged herein occurred in substantial part in this Judicial District.
11 10. In connection with the acts, conduct and other wrongs alleged in this compla
12 Defendants, direct or indirectly, used the means and instrumentalities of interstate commerce, includ
13 but not limited to, the United States mails, interstate telephone communications and the facilities of
14 national securities exchange.
15 THE PARTIES
16 11. Plaintiff Eugene L. Hammer, a resident of Savannah, Georgia, purchased BigB
17 publicly traded securities as described in the attached Certification during the Class Period at
18 inflated prices and was damaged thereby.
19 12. Defendant BigBand Networks Inc., founded in 1998, provides broadband
20 infrastructure for video, voice and data. BigBand is a Delaware corporation, with its principal place
21 business at 475 Broadway Street, Redwood City, California 94063.
22 13. Defendant Amir Bassan-Eskenazi ("Bassan-Eskenazi") was, at all relevant times,
23 Company's Chief Executive Officer, President, Co-founder and Chairman of the Board of Directors
24 Defendant Bassan-Eskenazi signed the Company's Registration Statement, assisted in the preparation o
25 the false financial statements, and repeated the contents therein to the market. Defendant Bassan
26 Eskenazi sold 400,000 shares in the BigBand IPO for proceeds of $4.83 million.
27 3 28 CLASS ACTION COMPLAINT 1 14. Defendant Frederick A. Ball ("Ball") was, at all relevant times, the Senior Vice Presi
2 Chief Financial Officer, and Principal Accounting Officer of BigBand. Defendant Ball signed
3 authorized the signing of the Company's false and misleading Registration Statement, assisted in
4 preparation of the false financial statements and repeated the contents therein to the market.
5 15. Defendant Ran Oz ("Oz") was, at all relevant times , BigBand's Chief T
6 Officer, Co-founder and a Director ofthe Company. Defendant Oz signed the Company's
7 Statement via a power of attorney granted to Company Vice President and General Counsel, Rol
8 Horton. Defendant Oz serves as a Director on behalf of Oz Holdings, Inc. Defendant Oz and/or
9 Holdings, Inc. sold 400,000 shares in the IPO for proceeds of $4.83 million.
10 16. Defendant Lloyd Carney ("Carney") was, at all relevant times, a Director of
11 Company. Defendant Carney signed the Company's Registration Statement via a power of attc
12 granted to Company Vice President and General Counsel, Robert Horton. Defendant Carney
13 20,000 shares in the IPO for proceeds of $260,000.
14 17. Defendant Dean Gilbert ("Gilbert") was, at all relevant times, a Director ofthe Company
15 Defendant Gilbert signed the Company's Registration Statement via a power of attorney granted ti
16 Company Vice President and General Counsel, Robert Horton. Defendant Gilbert serves on BigBand'
17 Board as the representative of Sandalwood Investments II, L.P. Defendant Gilbert and/or Sandalwooi
18 Investments sold 20,109 shares in the BigBand IPO for proceeds of $243,117.
19 18. Defendant Ken Goldman ("Goldman") was, at all relevant times, a Director of
20 Company. Defendant Goldman signed the Company' s Registration Statement via a power
21 granted to Company Vice President and General Counsel, Robert Horton.
22 19. Defendant Gal Israely ("Israely") was, at all relevant times, a Director of the Company
23 Defendant Israely signed the Company's Registration Statement via a power of attorney granted t
24 Company Vice President and General Counsel, Robert Horton. Defendant Israely serves on BigBand'
25 Board on behalf of Cedar Funds. Cedar Funds sold 446,229 shares in the BigBand IPO for proceeds
26 approximately $5.4 million.
27 4 28 CLASS ACTION COMPLAINT 1 20. Defendant Bruce Sachs ("B. Sachs") was, at all relevant times, a Director of
2 Company. Defendant B. Sachs signed the Company's Registration Statement via a power of attorr
3 granted to Company Vice President and General Counsel, Robert Horton. Defendant Sachs is Gene
4 Partner of Charles River Ventures and serves as Charles River's designee on BigBand's Board
5 Directors.
61 21. Defendant Robert Sachs ("R. Sachs") was, at all relevant times, a Director of
7 Company. Defendant R. Sachs signed the Company's Registration Statement via a power of
8 granted to Company Vice President and General Counsel, Robert Horton.
9 22. Defendant Geoffrey Yang ("Yang") was, at all relevant times, a Director ofthe Company
10 Defendant Yang signed the Company's Registration Statement via a power of attorney granted
11 Company Vice President and General Counsel, Robert Horton. Defendant Yang is a Partner at Redpc
12 Ventures, and serves on BigBand's Board of Directors as the designee ofRedpoint Ventures. Defend
13 Yang and/or Redpoint Ventures sold 15,000 shares for proceeds of $195,000.
14 23. Defendants Bassan-Eskenazi, Oz, Carney, Gilbert, Goldman, Israely, B. Sachs, R. Say
15 and Yang are collectively referred to hereinafter as the Individual Defendants. The Individ
16 Defendants, because of their positions with the Company, possessed the power and authority to cont
17 the contents of BigBand's quarterly reports, press releases and presentations to securities anal
18 money and portfolio managers and institutional investors, i. e., the markets. Each Individual Defen
19 was provided with copies of the Company's reports and press releases alleged herein to be misleadi
20 prior to or shortly after their issuance and had the ability and opportunity to prevent their issuance
21 cause them to be corrected. Because of their positions, each of these Individual Defendants knew t]
22 the adverse facts specified herein had not been disclosed and were being concealed from the public
23 that the positive representations which were being made were then materially false and mislead
24 Individual Defendants are liable for the false statements pleaded herein, as those statements were e
25 "group published" information, the result of the collective actions of the Individual Defendants.
26
27 5 28 CLASS ACTION COMPLAINT 1 C /"'PTT 1^TTT' 1
21 24. As alleged herein, Defendants acted with scienter in that Defendants knew that the
3 documents and statements issued or disseminated in the name ofthe Company were materially false an(
4 misleading; knew that such statements or documents would be issued or disseminated to the investing
5 public; and knowingly and substantially participated or acquiesced in the issuance or dissemination o
6 such statements or documents in violation ofthe federal securities laws. As set forth elsewhere herein ii
7 detail, Defendants, by virtue of their receipt of information reflecting the true facts regarding BigBand
8 their control over, and/or receipt and/or modification of BigBand's allegedly materially misleading
91 misstatements and/or their associations with the Company which made them privy to confident
10 1 proprietary information concerning BigBand, participated in the fraudulent scheme alleged herein.
11 CLASS ACTION ALLEGATIONS
12 25. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
13 23(a) and (b)(3) on behalf of a Class consisting of all purchasers of the publicly traded securities o
14 BigBand during the Class Period, including purchasers of BigBand securities pursuant or traceable to
15 Registration Statement and Prospectus issued in connection with the Company's IPO (the "Class").
16 26. Excluded from the Class are Defendants, the officers and directors ofthe Company at
17 relevant times, members oftheir immediate families and their legal representatives, heirs, successors
18 assigns and any entity in which Defendants have or had a controlling interest.
19 27. Questions of law and fact common to the members of the Class which predominate
20 questions which may affect individual Class members include:
21 i. Whether the federal securities laws were violated by Defendants by the acts
22 herein;
23 ii. Whether Defendants omitted and/or misrepresented material facts to the
24 public during the Class Period about the business, operations and management o
25 BigBand;
26 iii. Whether Defendants' statements omitted material facts necessary to make
27 statements made, in light of the circumstances under which they were made, 6 28 CLASS ACTION COMPLAINT I misleading;
2 iv. Whether Defendants knew or deliberately disregarded that their statements were
3 and misleading;
4 v. Whether the price of BigBand common stock was artificially inflated; and
5 vi. The extent of damage sustained by Class members and the proper measure of dama
6 28. At all relevant times, the market for BigBand securities was an efficient market for
7 following reasons:
8 i. BigBand securities were actively traded on NASDAQ, an efficient and
9 market;
10 ii. During the Class Period, thousands of shares of BigBand securities were
11 on the open market;
12 iii. BigBand filed periodic public reports with the SEC and the NASDAQ fol
13 the responsibilities of a regulated issuer of stock; and
14 iv. BigBand was covered by multiple securities analysts employed by differ,
15 brokerage firms. Reports were penned by these analysts that were distributed
16 their respective brokerage firms. These reports were publicly available z
17 entered the public marketplace.
18 29. Plaintiff's claims are typical of those of the Class because the market for BigBz
19 securities absorbed current information regarding the Company from all publicly available sources a
20 reflected that information in BigBand's share price. Under these circumstances, all purchasers of 1
21 Company's common shares during the Class Period suffered similar injury through their purchase
22 shares at artificially inflated prices and presumably relied upon the information publicly available.
23 30. The members of the Class are so numerous that joinder of all members is impracticab
24 The disposition of their claims in a class action will provide substantial benefits to the parties and
25 Court. Throughout the Class Period, BigBand securities were actively traded on NASDAQ
26 millions of shares of stock outstanding, owned by hundreds, if not thousands, of persons. While
27 exact number of Class members is unknown to Plaintiff at this time and can only be ascertained thro
1) Qn 7 -- 11 CLASS ACTION COMPLAINT 1 I appropriate discovery, Plaintiff believes that there are hundreds or thousands of members in
2 proposed Class.
3 31. Plaintiff will adequately protect the interests of the Class and has retained counsel
4 are experienced in class action securities litigation. Plaintiff has no interests which conflict with those
5 the Class.
61 32. A class action is superior to other available methods for the fair and efficient
7 of this controversy. Furthermore, as the damages suffered by individual Class members may
8 relatively small, the expense and burden of individual litigation make it impossible for members of
9 Class to individually redress the wrongs done to them. Plaintiff's counsel is experienced in comp
10 litigation of this nature and there will be no difficulty in the management of this case as a class acti
11 SUBSTANTIVE ALLEGATIONS
12 33. BigBand recognizes revenue mainly from the sale of products. BigBand's
13 revenue source is derived from the sale of services. In 2006, the sale ofproducts netted BigBand $154.
14 million in revenue (approximately 87.2% of total net revenue), and the sale of services netted Bi
15 $22.6 million in revenue (approximately 12.8% of net revenue).
16 34. BigBand product sales are divided primarily into three markets : TelcoTV, Sw
17 Broadcast video, and data.
18 35. BigBand's TelcoTV sales have historically been primarily sales to Verizon. The prop
19 is however, available to all telephone companies that use a broadband multimedia-service router (BT
20 such as BigBand' s for the real-time processing and switching ofvideo. BigBand states in its Prospe
21 that its TelcoTV products are a major attraction to telephone companies for reasons of convenience
22 cost savings.
23 We enable telephone companies to leverage their existing Synchronous Optical Network, or SONET, infrastructure which was originally designed for voice communications, to transport 24 video content throughout the network. This provides significant cost savings as telephone companies are not required to build a dedicated video transport network. 25
26 36. According to BigBand's Prospectus, there are some unique and innovative aspects
27 BigBand's Switched Broadcast application: 8 28 CLASS ACTION COMPLAINT Our Switched Broadcast application enables service providers to transmit video channels to subscribers only when the subscribers in a smaller subset of subscribers within the network, 2 called a service group, are in the process of watching those channels. Depending on the number of subscribers and the amount of duplicate channels within a service group, our 3 Switched Broadcast product application typically allows service providers to achieve up to 4 50% bandwidth savings in the delivery of digital video content and use the reclaimed bandwidth to offer additional content. 5 37. However, the company's commercial products were hardly that, since BigBand 6 growing undisclosed product implementation woes and serious product commercialization issues 7
8 potentially would have derailed the Company's financial projections claims.
9 FALSE AND MISLEADING STATEMENTS ISSUED BY DEFENDANTS
10 38. On or about March 14, 2007, BigBand filed with the SEC a Form S-1 11 Registration Statement for its IPO. The SEC issued an Effectiveness Order, and the S-1 became 12 March 14, 2007. 13 39. From approximately March 14, 2007 to March 20, 2007, the Company sold 7.5 14
15 shares of BigBand common stock and selling stockholders sold 4.8 million shares, for a total of 1
16 million shares at $13 per share for proceeds totaling $159.9 million. (Form 8-K, March 20, 2007)
17 Individual Defendants Bassan-Eskenazi, Oz, Gilbert, and Israely all sold stock as a part of the initi 18 public offering for a profit of approximately $16.4 million. 19 40. In the Prospectus, BigBand represented, among other things, that it had experienced 20 revenue growth from 2005 to 2006 (from $98.0 million to $176.6 million) and had operated profitably 21 the third and fourth quarters of 2006 and overall for the year. The Registration Statement stated in part: 22
23 We develop, market and sell network-based platforms that enable cable operators and telephone companies, collectively called service providers, to offer video, voice and 24 data services across coaxial, fiber and copper networks. We have significant expertise in rich media processing, communications networking and bandwidth management. 25 We have delivered what we believe to be the only successful commercial deployments of switched broadcast, an application that substantially increases the 26 volume of content that a service provider can offer. In addition, we were the first to 27 implement what we believe has become the industry's de facto network architecture 9 28 CLASS ACTION COMPLAINT for digital simulcast, an application that facilitates the insertion of advertising and the transmission of video in a digital format across a network while still providing service 2 to analog subscribers . Our product applications of Digital Simulcast, TelcoTV, Switched Broadcast, and High-Speed Data 3 and Voice-over-IP are a combination of our modular software and programmable video and data hardware platforms. 4 Our software and hardware product applications are used by leading service providers 5 worldwide to offer video, voice and data services to tens of millions of subscribers, 24 hours a day, seven days a week. We have sold our product applications to more than 6 100 customers globally, including Cablevision, Charter, Comcast, Cox, Time Warner Cable and Verizon, which are six 7 of the ten largest service providers in the United States. Our net revenues increased 80.3% to $176.6 million for the year ended 8 December 31, 2006 from $98.0 million in 2005. We have been profitable on a quarterly basis since the three months ended September 30, 2006, and we first 9 achieved profitability on an annual basis in 2006. 10 41. In the Company' s Registration Statement, BigBand stated that product sales during 11 were a result of an $87.6 million increase in revenues from video products, partially offset by a $19. 12 million decrease in revenues from data products. The Registration Statement further stated that a primar 13 reason for the $87.6 million growth in video product revenues during 2006 was that the Company sa` 14
15 the first recognizable net revenues from BigBand's TelcoTV product:
16 Net revenues for 2006 were $176.6 million compared to $98.0 million for 2005, an increase of $78.6 million, or 80.3%. Revenues from our top five customers comprised 17 79% and 69% of net revenues for 2006 and 2005, respectively. During 2006, revenues from customers in the United States comprised 89% of net revenues, and revenues 18 from customers outside the United States comprised 11 % of net revenues, compared 19 to the same period in 2005, in which customers in the United States comprised 83% of net revenues, and revenues from customers outside the United States comprised 17% 20 of net revenues.
21 Products revenues for 2006 were $154.0 million compared to $86.0 million for 2005, an increase of $68.0 million, or 79.2%. This increase was primarily due 22 to a $87.6 million increase in revenues from our video products, partially offset by a $19.6 23 million decrease in revenues from our data products. The $87.6 million increase in video products was attributable to the first recognition of significant net revenues 24 from our TelcoTV product and significant growth in revenues from our Switched Broadcast product. The decrease in revenues from data products was almost entirely 25 due to $18.8 million of revenues recognized in 2005 following satisfaction of customer acceptance criteria for product shipped 26 to a single customer in 2004.
27
28 10 CLASS ACTION COMPLAINT 42. According to the Registration Statement, BigBand's "sales cycle for an initial
2 purchase typically ranges from nine to eighteen months..." However, "[a]fter initial deployment of 3 products, subsequent purchase of our products typically have a more compressed sales cycle." 4 43. Approximately 89% of BigBand' s sales in 2006 were to customers in the United 5 BigBand sells its products and services to customers in the United States through a direct sales force. 6 44. The Registration Statement described BigBand's sales as highly concentrated among 7
8 five largest customers . Over time, sales to those customers became more concentrated, equaling 90%
9 revenue in the fourth quarter of 2006. The Registration Statement further indicated that sales at the
10 of the filing were concentrated among four customers : Comcast, Cox, Time Warner Cable and V 11 Each of these four customers represented more than 10% of sales during 2006: 12 A substantial majority of our sales have been to relatively few customers. However, 13 our large customers have changed over time. Sales to our five largest customers represented 79%, 69% and 61% of our net revenues in the year ended December 31, 14 2006, the year ended December 31, 2005, and the year ended December 31, 2004, respectively, and were particularly significant in the three months ended 15 December 31, 2006 when they represented approximately 90% of our net 16 revenues. In 2006, Comcast, Cox, Time Warner Cable and Verizon each represented 10% or more of our net revenues. In 2005, Adelphia, Cox and Time Warner Cable 17 each represented 10% or more of our net revenues. In 2004, Adelphia, Comcast, Cox and Time Warner Cable each represented 10% or more of our net revenues. Although 18 we are attempting to broaden our customer base by penetrating new markets and expect continuing customer concentration due to the 19 expanding internationally, we significant capital costs of constructing service provider networks and industry 20 consolidation. We expect that in future periods a limited number of large customers will continue to comprise a large percentage of our revenues. 21 45. In the Company 's Prospectus, BigBand stated that the Company had maintained a 22 established backlog: 23 customer commitment demonstrated through its
24 We schedule production of our products based upon our backlog, open contracts, informal commitments from customers and sales projections . Our backlog consists 25 of firm purchase orders by customers for delivery within the next six months. As of December 31, 2006, we had backlog of $36.2 million, compared with backlog of 26 $33.1 million as of December 31, 2005. Anticipated orders from customers may fail of 27 to materialize and delivery schedules may be deferred or canceled for a number 11 28 CLASS ACTION COMPLAINT 1 reasons, including reductions in capital spending by service providers or changes in specific customer requirements. Because of the complexity of our customer 2 acceptance and revenue recognition criteria, in addition to backlog, we have significant deferred revenues. As a result, our backlog alone is not necessarily 3 indicative of revenues for any succeeding period. 4 46. BigBand reported $56.7 million in net revenue and $8.9 million in net income for 5 fourth quarter of 2006 according to the Prospectus. 6 47. The statements referenced above were each materially false and misleading because 7
8 failed to disclose and misrepresented at least the following adverse facts: (1) that the Company
9 distorted the growth in its sales through the method of channel stuffing on sales of TelcoTV products
10 Verizon prior to the IPO; and (2) BigBand was experiencing delays in customer acceptance of 11 specific products due to difficulty in customizing these products. 12 48. In reliance on the truth and accuracy of the representations contained in the 13 with respect to BigBand's business, BigBand common stock traded from March 15, 2007 (the first 14 BigBand common stock traded) and May 3, 2007 between $17.00 and $21.43 per share. 15
16 49. On May 3, 2007, after the close of trading on U.S. securities markets, BigBand issued
171 press release reporting first quarter 2007 financial results. For the quarter ended March 31, 2007
18 BigBand reported net revenues of $52.8 million (62% over the prior year) and a GAAP net loss of $1. 19 million or ($0.05) per diluted share. The company reported that non-GAAP results (excluding 20 non-cash charges) were $5 . 8 million, or $0.09 per diluted share . (Form 8-K, May 3, 2007). 21 50. Defendants Bassan-Eskenazi-Eskanazi was quoted in the press release as stating: 22
23 During the quarter, we continued to see an expansion of our installed base of solutions and of the capacity of our existing footprint, which favorably benefited our gross 24 margin.
25 We are delighted to report strong financial results for the first quarter of 2007, our first quarter as a public company. Some of the world's largest cable and 26 telecommunications carriers continue to demonstrate interest in our media services 27 12 28 CLASS ACTION COMPLAINT platforms, built upon a unique combination of networking, video processing, and bandwidth management capabilities. 2 We believe that our financial achievements to date demonstrate the increasing 3 consumer demand for more and better video services, including high-definition 4 programming. Our growth continues to be a function of the broader adoption of our switched broadcast solution by major cable operators and the increasing deployment 5 of television services by telecommunications carriers, among many other initiatives.
6 Looking ahead, we are optimistic about our business and long-term market opportunity. We expect to further leverage our platform and gain footprint with new 7 customers in new geographies. BigBand Networks continues to innovate, and we 8 believe our technology will remain a key point of differentiation in the future.
9 51. The May 3, 2007 press release reported that management anticipated net revenues for
10 second quarter of 2007 would be in the range of approximately $52 to $56 million and that 11 earnings per share would be in the range of $0.02 to $0.06 per share. For 2007, net revenues 12 anticipated to be in the range of approximately $225 to $230 million, and GAAP earnings per share 13 anticipated to be in the range of $0.06 to $0.11 per share. 14 52. On a conference call conducted immediately after the issuance of the May 3, 2007 15
16 release, Defendant Bassan-Eskenazi stated that BigBand's "switched broadcast solution continue to be
17 major driver of our business... We are now deploying our fourth-generation switched broadcast produce
18 while many competitors are still developing their first and switched broadcast is a fraction of the cost c 19 competing alternatives.... Time Warner Cable was the first major cable operator to adopt switche 20 broadcast. During the first quarter of 2007, we recognized revenue associated with Cablevision' 21 deployment of switched broadcast, the second [Multiple System Operator] to adopt our solution." 22 "continuing demand for [its' 23 53. Bassan-Eskenazi further stated that BigBand was seeing
24 TelcoTV solutions" in the first quarter:
25 BigBand carrier-grade platform is deployed at the edge of our Telco customers' networks and is used to ensure reliable and efficient delivery of TV programming. We 26 continue to support the ongoing rollout of Verizon's FiOS TV. Our ability to 27 successfully deploy with this important customer gives us the confidence in our 13 28 CLASS ACTION COMPLAINT 1 platform fit for TelcoTV, as well as validates our ability to add value to this important market segment. 2 54. On that same conference call, Defendant Ball assured investors that he had good visibi 3
4 on projecting second quarter operations and at the end ofthe second quarter would have an equally
5 basis for projecting third quarter operations: "I still view the world as a kind of six- month window.
6 have a ... pretty good view of Q2 . I have a little bit less so view of Q3. There are some things that 7 to happen in Q2 for me to fill in Q3...." 8 55. With regard to certain orders where the products had not yet been deployed, Ball 9 that "our typical pattern from switched broadcast orders is kind of a six-to-nine month window 10 revenue or sign-off by the customers," and those orders where products had not been deployed were 11
12 included in current period projections.
13 ADVERSE FACTS HIDDEN FROM THE PUBILC, NOW REVEALED
14 56. On August 2, 2007, after the close ofthe U. S. securities markets, BigBand issued a 15 release reporting second quarter 2007 operating results. Net revenues for the second quarter 16 reported at $54.5 million (43% over the prior year). GAAP net income for the quarter was $1.7 17 or $0.02 per diluted share. Defendant Bassan-Eskenazi was quoted in the press release as stating: 18 our improvements in both revenues and earnings results in the second 19 We are pleased with quarter. We continued to drive significant expansion of the footprint of our media service 20 platforms. We continue to work closely with customers in supporting their efforts to enhance their existing networks for advanced video services. We believe that BigBand's 21 solutions for switched broadcast and TelcoTV will continue to gain traction with major customers both in the U.S. and internationally. 22 *** 23 Video continues to be a major driver of capital expenditures in service provider networks. 24 We believe that our technology, innovation and time-to-market leadership are key competitive differentiators in our video and data markets. Our product roadmap calls for 25 more innovation as the industry moves to addressable advertising and personalized video services. We continue to be well positioned for additional growth over the long-term 26 and are optimistic about our business. [emphasis added] 27 14 28 CLASS ACTION COMPLAINT 1 57. The August 2, 2007 press release added that management ' s current expectations for
2 third quarter were net revenues of approximately $54 to $58 million, and GAAP earnings (loss) 3 share in the range of ($0.01) to $0.03 per share . The Company again indicated that net revenues 4 anticipated to be in the range of approximately $225 to $230 million, and that GAAP earnings per 5 were anticipated to be in the range of $0.03 to $0.08 per share. This was less than previous 6 forecasts for revenues and earnings. 7
8 58. On a conference call conducted on August 2, 2007, immediately after issuance of
9 August 2, 2007, press release, Defendant Bassan-Eskenazi sought to quell investor discontent caused
10 the reduced income forecast. Bassan-Eskenazi assured investors that "[w]e are growing our top-line as 11 direct impact ofthe healthy demand for the unique video solutions which drive strategic footprint 12 with key customers." Bassan-Eskenazi added that "[t]he competition among cable, satellite and 13 providers is accelerating, and is causing all of them to invest heavily and add new capabilities to 14 network. growing industry second quarter we experienced 15 As a result of these trends, in the
16 growth, meaningful design wins, and significant milestones."
17 59. On September 27, 2007, after the close of trading on U.S. securities markets, BigB 18 announced in a press release entitled "BigBand Networks Announces Revised Revenue Outlook 19 Third Quarter of 2007" that it was revising "its revenue outlook for the third quarter ending 20 30, 2007." The Company now expected to "report revenue for the third quarter in the range of $35 21 $39 million," which was "below the Company's previous guidance of $54 to $58 million" by as much 22
23 23 million. BigBand's revised revenue forecast for the third quarter reflected no revenue growth
24 revenue for the third quarter of 2006.
25 60. BigBand attributed the reduced revenue outlook "to several coincident factors": 26
27 15 28 CLASS ACTION COMPLAINT 1 i. Referencing the deployment of switched digital video across "an expanding
2 number of customers and configurations," BigBand explained that "[s]ome ... 3 deployments have required more software customization and integration than 4 originally expected. This impacted the Company's ability to recognize 5 switched digital revenue for some deployments in the third quarter"; 6
7 ii. Because a "major customer" (presumably Verizon) "worked through some
8 previously purchased inventory" TelcoTV revenue was reduced; 9 iii. BigBand "experienced continued softness in its data business." 10
11 61. The September 27, 2007, press release added that "[a]s a result of lower revenue
12 expectations, BigBand expects to report an operating loss for the third quarter of fiscal year 13 2007."Bassan-Eskenazi's comments in the press release included in relevant part: 14 While we believe the market for our video solutions continues to be strong and are 15 confident in our roadmap for the long term, we are clearly disappointed in our execution this quarter. We are aggressively addressing these issues and will provide 16 more specifics in our announcement of third quarter financial results in early November. 17
18 62. Once the true status of BigBand's product development problems came to light, BigBan 19 was forced to reveal to the market its current and potential depressed financial performance and outlook. 20 In response to this negative news, the market quickly reacted. Shares ofthe Company's stock fell $2.6 21
22 per share, or 29.4 percent, to close, on September 28, 2007, at $6.40 per share.
23 63. Morgan Keegan analyst Simon Leopold cut his rating on the stock to market perform
24 from outperform. Jefferies & Co. also cut its rating on the company to hold from buy, reducing 2007 25 revenue estimates to $181.7 million from $224.6 million. Jefferies analyst George Notter said in 26 research note, "[w]e recommend that investors stay on the sidelines." 27 16 28 CLASS ACTION COMPLAINT 1 64. The nearly 28% decline in the price of BigBand Networks stock on August 3, 2007, anc
2 the subsequent 29% decline on September 28, 2007, at the end ofthe Class Period, were the direct resul- 3 of the nature and extent of Defendants ' fraud finally being revealed to investors and the market. The 4 timing and magnitude of BigBand Networks ' stock price declines negate any inference that the los: 5 suffered by Plaintiff and other Class members was caused by changed market conditions 6 macroeconomics or industry factors or Company-specific facts unrelated to the Defendants' fraudulen 7
8 conduct.
9 POST CLASS PERIOD REVELATIONS
10 65. On October 18, 2007, Frederick Ball stepped down as Chief Financial Officer o: 11 BigBand. The arrangement called for his employment to end November 26, 2007, with the Compan3 12 option to continue use of his consultation services through May 1, 2008. 13 66. On October 30, 2007, BigBand announced the results of its operations for the thin 14
15 quarter ended September 30, 2007 . The Company reported a net loss of $2.7 million or ($0.05) pe:
16 diluted share in the third quarter compared to net income of $3.5 million, or $0.06 per diluted share ft
17 the third quarter of 2006. The Company also announced a restructuring plan that would reduce it: 18 workforce by 15%. 19 NO SAFE HARBOR 20 67. The statutory safe harbor provided for forward-looking statements under certain 21 circumstances does not apply to any of the allegedly false statements pleaded in this Complaint. Th( 22
23 statements alleged to be false and misleading herein all relate to then-existing facts and conditions. Ii
24 addition, to the extent certain of the statements alleged to be false may be characterized as forwarc
25 looking, they were not identified as "forward-looking statements" when made, there was no statemen 26 made with respect to any of those representations forming the basis of this Complaint that actual result; 27 17 28 CLASS ACTION COMPLAINT 1 "could differ materially from those projected," and there were no meaningful cautionary statements
2 identifying relevant important factors that could cause actual results to differ materially from those in 3 the purportedly forward-looking statements. Alternatively, to the extent that the statutory safe harbor 4 does apply to any forward-looking statements pleaded herein, Defendants are liable for those false 5 forward-looking statements because at the time each of those forward-looking statement was false. 6 68. The statutory safe harbor provided for forward-looking statements under certain 7
8 circumstances, moreover, does not apply to false statements or material omissions of existing facts.
9 COUNT I Against All Defendants For Violation of Section 11 10 of the Securities Exchange Act 11 69. Plaintiff incorporates Paragraphs 1 - 68 by reference, except those claims sounding in 12 fraud, as if set forth in full herein. 13 70. This claim is brought by Plaintiff and all other members of the Class who obtained 14 BigBand securities pursuant to the Registration Statement. Each Class member acquired their shares 15
16 pursuant to or traceable to, and in reliance on, the Prospectus.
17 71. The Individual Defendants each filed the Prospectus with the SEC and distributed it to
18 investors and/or signed the IPO Registration Statement. 19 72. All Defendants as signatories of the Registration Statement and the Prospectus, directors 20 and/or officers of BigBand and controlling persons of the issuer, owed to the purchasers of the stock, 21 including Plaintiff and the Class, the duty to make a reasonable and diligent investigation or possess 22 reasonable grounds for the belief that the statements contained in the Registration Statement and the 23
24 Prospectus, at the time they became effective, were true or that there was no omission of material facts
25 required to be stated in order to make the statements contained therein not misleading.
26
27 18 28 CLASS ACTION COMPLAINT 1 73. BigBand is the issuer of the securities sold via the Registration Statement. As issuer of
2 the securities, the Company is strictly liable to Plaintiff and the Class for the material misstatements and 3 omissions therein. 4 74. Defendants issued and disseminated, caused to be issued and disseminated, and 5 participated in the issuance and dissemination of, material misstatements to the investing public which 6 were contained in the Prospectus, which misrepresented or failed to disclose, inter alia, the facts set forth 7
8 above. These omissions were a violation of SEC Regulation S-K, Item 303(a), which requires that trends
9 which will have a material effect on a registrant's results be disclosed. By reason of the conduct herein
10 alleged, each Defendant violated and/or controlled a person who violated Section 11 of the Securities 11 Act. 12 75. As a direct and proximate result of Defendants' acts and omissions in violation of the 13 Securities Act, Plaintiff and the Class suffered substantial damage in connection with their ownership of 14 securities the Registration Statement the Prospectus. 15 BigBand pursuant to and
16 76. By virtue of the foregoing, Plaintiff and the other members of the Class are entitled tc
17 damages under Section 11 as measured by the provisions of Section 11(e), from each ofthe Defendant,,
18 jointly and severally. 19 COUNT II 20 Against Individual Defendants For Violations of Section 15 of The Securities Act 21 77. Plaintiff incorporates Paragraphs 1 - 76 by reference, except those claims sounding it 22 fraud, as if set forth in full herein. 23
24 78. This count is asserted against Individual Defendants and is based upon Section 15 ofthe
25 Securities Act.
26
27 19 28 CLASS ACTION COMPLAINT 1 79. Individual Defendants, by virtue of their offices, directorship and specific acts were, at
2 the time set forth herein, controlling persons of BigBand with respect to the Registration Statement and 3 Prospectus, within the meaning of Section 15 of the Securities Act. Individual Defendants had the 4 power and influence to cause and did cause BigBand to engage in the acts described herein. 5 80. The positions Individual Defendants held made them privy to and provided them with 6 actual knowledge of the material facts concealed from Plaintiff and the Class. 7
8 81. By virtue of the conduct alleged herein, Individual Defendants are liable for the wrongful
9 conduct asserted under this claim and Count I and are liable to Plaintiffs and the Class for damages
10 suffered. 11 COUNT III 12 Against Defendants BigBand Networks Inc., Amir Bassan-Eskenazi, and 13 Frederick A. Ball For Violation of § 10(b) of the Exchange Act and Rule 10b-5 Against All Defendants 14 82. Plaintiff incorporates Paragraphs 1 - 81 by reference, as if set forth in full herein. 15
16 83. During the Class Period, Defendants, individually and in concert, directly or indirectly,
17 disseminated or approved the false statements specified above, which they knew or deliberately
18 disregarded were misleading in that they contained misrepresentations and failed to disclose materia. 19 facts necessary in order to make the statements made, in light of the circumstances under which the) 20 were made, not misleading to Plaintiff and other members of the Class, and employed manipulative of 21 deceptive devices and contrivances in connection with the purchase and sale of BigBand securities. 22 84. The purpose and effect of Defendants' plan, scheme and course of conduct was tc 23
24 artificially inflate the price of BigBand's securities and to artificially maintain the market price o:
25 BigBand securities.
26
27 20 28 CLASS ACTION COMPLAINT 1 85. Individual Defendants Bassan-Eskenazi and Ball, who were the top officers of
2 Company, had actual knowledge of the material omissions and/or the falsity of the material statem 3 set forth above, and intended to deceive Plaintiff and the other members of the Class, or, in 4 alternative, acted with reckless disregard for the truth when they failed to ascertain and disclose 5 facts in the statements made by them or other BigBand personnel to members of the investing 6 including Plaintiff and the Class, and the securities analysts. 7
8 86. As a result of the foregoing, the market price of BigBand securities was arti
9 inflated during the Class Period. In ignorance ofthe falsity of the Defendants' statements concerning I
10 operating results and performance of BigBand, Plaintiff and the other members of the Class relied, 11 their damage, on the statements described above and/or the integrity of the market price of BigBa 12 securities during the Class Period in purchasing BigBand securities at prices which were artificia 13 inflated as a result of Defendants' false and misleading statements. 14 87. Had Plaintiff and the other members of the Class known of the material ad 15
16 information which Defendants did not disclose, they would not have purchased BigBand securities at
17 artificially inflated prices that they did.
18 88. Defendants' concealment of this material information served only to harm Plaintiff 19 the other members of the Class who purchased BigBand securities in ignorance of the financial risk 20 them as a result of such nondisclosures. 21 89. As a result of the wrongful conduct alleged herein, Plaintiff and other members of 22 amount to be established at trial. 23 Class have suffered damages in an
24 90. By reason of the foregoing, Defendants have violated Section 10(b) ofthe Exchange
25 I and Rule I Ob-5 promulgated thereunder. 26 91. As a direct and proximate result of Defendants' wrongful conduct, Plaintiff and the 27 21 28 CLASS ACTION COMPLAINT 1 members of the Class suffered damages in connection with their respective purchases and sales of thi
2 Company's common stock during the Class Period and are entitled to the substantial damages whicl 3 they suffered in connection with their purchases of BigBand securities during the Class Period. 4 COUNT IV 5 Against Individual Defendants For Violation of 4 20(a) of the Exchange Act 6 92. Plaintiff incorporates Paragraphs 1-91 by reference, as if set forth in full herein. 7
8 93. By virtue of their high-level positions as officers and/or directors of BigBand an(
9 ownership of BigBand stock, participation and or awareness ofthe Company operations, and/or intimat
10 knowledge ofthe false financial statements filed by the Company with the SEC and disseminated to the 11 investing public, the Individual Defendants acted as controlling persons of BigBand within the meanin; 12 of Section 20(a) ofthe Exchange Act. The Individual Defendants had the power and authority to cause 13 and did cause BigBand to engage in the wrongful conduct complained of herein. 14 94. Each of the Individual Defendants had the power to control or influence the unlawfu 15
16 conduct and practices complained of herein by causing BigBand to disseminate the false and misleadin
17 information referred to above.
18 95. By reason of such conduct, the Individual Defendants have violated Section 20(a) of th 19 Exchange Act. 20 96. By virtue of the conduct alleged above, the Individual Defendants are liable to th 21 Plaintiff and the other members ofthe Class for the substantial damages that they suffered in connectio 22
23 with their purchases of BigBand's securities during the Class Period.
24 WHEREFORE, Plaintiff, on his own behalf and on behalf of the other members of the
25 Class, demands judgment against the Defendants as follows: 26
27 22 28 CLASS ACTION COMPLAINT 1 A. Determining that this action is a proper class action pursuant to Rule 23 of the Federal
2 Rules of Civil Procedure and certifying Plaintiff as the Class Representative and his counsel as Class 3 Counsel; 4 B. Declaring and determining that Defendants violated the federal securities laws by 5 reason of their conduct as alleged herein; 6 C. Awarding Plaintiff and members of the class compensatory damages against all 7
8 Defendants, jointly and severally for all damages sustained as a result of the Defendants' wrongful
9 acts and transactions complained of herein, together with prejudgment interest from the date of the
10 wrongs to the date of the judgment herein; 11 D. Awarding Plaintiff and the class the costs, expenses, and disbursements incurred in 12 this action, including reasonable attorneys' and experts' fees; and 13 E. Awarding Plaintiff and the other members of the Class such other and further relief as 14 proper. 15 the Court may deem just and
16 JURY DEMAND
17 Plaintiff demands a trial by jury.
18
19 DATED: November 15, 2007 20 /^^, V - ]^,- 21 Laurence D. King (SBN 20642 lking_gkaplanfox.com 22 KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street, Suite 400 23 San Francisco , CA 94104 Telephone : 415-772-4700 24 Facsimile : 415-772-4707
25 Local Counsel for Plaintiff
26
27 23 28 CLASS ACTION COMPLAINT 1 Karen H. Riebel khriebel @locklaw.com 2 Elizabeth R. Odette [email protected] 3 LOCKRIDGE GRINDAL NAUEN P.L.L.P 100 Washington Avenue South 4 Suite 2200 Minneapolis, MN 55401 5 Telephone: (612) 339-6900 Facsimile: (612) 339-0981 6 Jayne Goldstein 7 MAGER & GOLDSTEIN LLP 1640 Town Center Circle, Suite 216 8 Weston, FL 33326 Telephone: 954-515-0123 9 Facsimile: 954-515-0124
10 Carolyn G. Anderson ZIMMERMAN REED, P.L.L.P. 11 651 Nicollet Mall, Suite 501 Minneapolis, MN 55402 12 Telephone : (612) 341-0400 Facsimile: (612) 341-0844 13 Joel Strauss 14 j strauss(a,kaplanfox. com Jeffrey Campisi 15 [email protected] KAPLAN FOX & KILSHEIMER LLP 16 850 Third Avenue, 14th Floor New York, NY 10022 17 Telephone: 212-687-1980 Facsimile: 212-687-7714 18
19 Attorneys for Plaintiff
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27 24 28 CLASS ACTION COMPLAINT PLAINTIFF CERTIFICATION
i. E s.) GiEtJ , L . _^ (^ t^ hereby state:
: °l; • -:- '.1 have reviewed• a Cotnplaiint against-B gBand;Networks, Inc., and certain of its officers and directors,: and authorized: tl e fi-lin -ifthe same or a similar c sf iplaintorr nybehalf.
2. 1 did not purchase any BigBand Networks, Inc. securities at the direction of counsel or in order to participate in this private action.
3. 1 am willing to serve as a representative party on behalf of a class, including providing testimony at deposition and trial, if !:ecessary.
4. The following includes all of' my transactions in BigBand Networks, Inc. securities during the Class Period (March 14, 2007 through September 27, 2007) as defined in the Complaint:
TRANSACTION TIRADE.DATE PRICE QUANTITY (PURCHASE, SALE, EXCHANGE, CALL, PUT, ETC.)
6 ^^t"1^. C VE L1 S 1
-^:. - :- t have Bled Ch'e-f'Ulii^viing ei:vil aeti^iaS a, a lepreserit t ve party on'beh l ^^i'a class under the federal securities laws. during-the last;three years: - -`- = : =` : • -
6. I will not accept any payment for serving as a representative party on behalf of a class except to receive my pro rata share of any recovery, or as ordered or approved by the Court, including the award to a representative party of reasonable costs and expenses including lost wages relating to the representation of the class.
I declare under penalty of perjury that the foregoing is true and correct.
Executed this 1 !!: day of _ pJ MGM 2007.
'- (signature)' Et L • f(^ h ME. (print name) ^c (county of residenc,e)
374973-1 Date Acquired Quantity Cost per Share 4/30/2007 200.0000 $20.46 4/30/2007 200.0000 $20.49 4/30/2007 300.0000 $20.52 4/30/2007 800.0000 $20.53 4/30/2007 2,500.0000 $20.54 5/07/2007 600.0000 $18.93 5/07/2007 1,400.0000 $18.94 United States District Court NORTHERN DISTRICT OF CALIFORNIA Efj^,ng
EUGENE L. HAMMER, on behalf of himself and SUMMONS IN A CIVIL CASE all others similarly situated, CASE NUMBER: V. NIJUP BIGBAND NETWORKS, INC. Q11 lt? Additional defendants on attachment
TO: (Name and address of defendant)
BIGBAND NETWORKS, INC. 475 Broadway Redwood City, CA 94063
YOU ARE HEREBY SUMMONED and required to serve upon PLAINTIFF'S ATTORNEY (name and address)
Laurence D. King KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street Suite 400 San Francisco , CA 94104-1308
an answer to the complaint which is herewith served upon you, within "' days after service of this summons upon you, exclusive of the day of service. If you fail to do so, judgement by default will be taken against you for the relief demanded in the complaint. You must also file your answer with the Clerk of this Court within a reasonable period of time after service.
Richard W. Wiekinca NOV 1 6 2007 CLERK
He le n L . At ac n
(BY) DEPUTY CLERK AO 440 (Rev. 8/01) Summons in a Civil Action
RETURN OF SERVICE DATE Service of the Summons and Complaint was made by me' Name of SERVER TITLE
Check one box below to indicate appropriate method of service
El Served Personally upon the Defendant. Place where served:
El Left copies thereof at the defendant's dwelling house or usual place of abode with a person of suitable age and discretion then residing therein. Name of person with whom the summons and complaint were left:
El Returned unexecuted:
El Other (specify):
STATEMENT OF SERVICE FEES TRAVEL SERVICES TOTAL
DECLARATION OF SERVER
I declare under penalty of perjury under the laws of the United States of America that the foregoing information contained in the Return of Service and Statement of Service Fees is true and correct.
Executed on Date Signature of Server
Address of Server
(1) As to who may serve a summons see Rule 4 of the Federal Rules of Civil Procedure ATTACHMENT TO SUMMONS
ADDITIONAL DEFENDANTS:
AMIR BASSAN-ESKENAZI, FREDERICK A. BALL, RAN OZ, LLOYD CARNEY, DEAN GILBERT, KEN GOLDMAN, GAL ISRAELY, BRUCE SACHS, ROBERT SACHS, and GEOFFREY YANG 1 Laurence D. King (SBN 206423) 1 lking(,kaplanfox.com 2 KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street, Suite 400
3 San Francisco , CA 94104 ^S y^^CA- CB Telephone : 415-772-4700 00 4 Facsimile : 415-772-4707
5 Local Counsel for Plaintiff
6 Karen H. Riebel [email protected] 7 Elizabeth R. Odette [email protected] 8 LOCKRIDGE GRINDAL NAUEN, P.L.L.P 9 100 Washington Avenue, Suite 2200 Minneapolis, MN 55402 10 Tel.: 612-339-6900 Fax: 612-339-0981 E®-fi fi 11 ng Additional Attorneys on signature page 12
13 UNITED STATES DISTRICT COURT *44P
14 NORTHERN DISTRICT OF CALIFORNIA 15 EUGENE L. HAMMER, on behalf of himselfflj ase 16 and all others similarly situated, CERTIFICATION OF INTERESTED 17 Plaintiff, ENTITIES OR PERSONS 18 vs. 19 BIGBAND NETWORKS, INC., AMIR 20 BASSAN-ESKENAZI, FREDERICK A. CARNEY, DEAN 21 BALL, RAN OZ, LLOYD GILBERT, KEN GOLDMAN, GAL 22 ISRAELY, BRUCE SACHS, ROBERT SACHS, and GEOFFREY YANG, 23 Defendants.
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28 CERTIFICATION OF INTERESTED ENTITIES OR PERSONS Pursuant to Civil L.R. 3-16, the undersigned certifies that as of this date, other than the
2 named parties, there is no such interest to report.
3
411 DATED: November 15, 2007
A 6 Laurence D. King (SBN 20(W3) lking@kaplanfox. com 7 KAPLAN FOX & KILSHEIMER LLP 350 Sansome Street, Suite 400 8 San Francisco , CA 94104 Telephone : 415-772-4700 9 Facsimile : 415-772-4707
10 Local Counsel for Plaintiff
11 Karen H. Riebel khriebel @locklaw. com 12 Elizabeth R. Odette [email protected] 13 LOCKRIDGE GRINDAL NAUEN P.L.L.P 100 Washington Avenue South 14 Suite 2200 Minneapolis, MN 55401 15 Telephone : (612) 339-6900 Facsimile: (612) 339-0981 16 Jayne Goldstein 17 MAGER & GOLDSTEIN LLP 1640 Town Center Circle, Suite 216 18 Weston, FL 33326 Telephone: 954-515-0123 19 Facsimile: 954-515-0124
20 Carolyn G. Anderson ZIMMERMAN REED, P.L.L.P. 21 651 Nicollet Mall, Suite 501 Minneapolis, MN 55402 22 Telephone : (612) 341-0400 Facsimile: (612) 341-0844 23
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28 CERTIFICATION OF INTERESTED ENTITIES OR PERSONS 1 Joel Strauss [email protected] 2 Jeffrey Campisi [email protected] 3 KAPLAN FOX & KILSHEIMER LLP 850 Third Avenue, 14th Floor 4 New York, NY 10022 Telephone: 212-687-1980 5 Facsimile: 212-687-7714
6 Attorneys for Plaintiff 7
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27 2 28 CERTIFICATION OF INTERESTED ENTITIES OR PERSONS JS 44 - C4ND (Rev. 11/04) E-fifi ng CIVIL COVER SHEET The JS-44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON PAGE TWO.) I.(a) PLAINTIFFS DEFENDANTS EUGENE L. HAMMER., on behalf of himself and all others Bigband Networks, Inc., Amir Bassan-Eskenazi, Frederick A. similarly situated Ball, Ran Oz, Lloyd Carney, Dean Gilbert, Ken Goldman, Gal Israely, Bruce Sachs, Robert Sachs, and Geoffrey Yang
COUNTY OF RESIDENCE OF FIRST LISTED DEFENDANT (b) COUNTY OF RESIDENCE OF FIRST LISTED PLAINTIFF (IN U.S. PLAINTIFF CASES ONLY) (EXCEPT IN U.S. PLAINTIFF CASES) NOTE : IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. Chatham County, Georgia
(C) ATTORNEYS (FIRM NAME . ADDRESS . AND TELEPHONE NUMBER ) ATTORNEYS (IF KNOWN) Kaplan Fox & Kilsheimer LLP, 350 Sansome Street, Suite 400 San Francisco, CA 94104 Tel: 415-772-4700
II. BASIS OF JURISDICTION (PLACE AN 'X' IN ONE BOX ONLY) III. CITIZENSHIP OF PRINCIPAL PARTIES (PLACE AN'XIN ONE BOX FOR PLAINTIFF (For diversity cases only) AND ONE BOX FOR DEFENDANT) E1 U.S. Government PTF DEF PTF DEF Plaintiff 233 Federal Question Citizen of This State M1 (1 Incorporated or Principal Place C4 Q4 (U.S. Government Not a Party) of Business In This State 0 2 U.S. Government Defendant 04 Diversity Citizen of Another State E12 02 Incorporated and Principal Place E3 5 E35 (Indicate Citizenship of Parties in of Business In Another State Item III) Citizen or Subject of a 03 E3 Foreign Nation 06 36 Foreign Country
IV. ORIGIN (PLACE AN "X" IN ONE BOX ONLY)
Wl Original 0 Removed from I I Remanded from 0 Reinstated or Transfered from EJ Multidistrict E Appeal to District Proceeding State Court Appellate Court Reopened Another district Litigation Judge from Magistrate (specify) Judgment
V. NATURE OF SUIT (PLACE AN'X"IN ONE BOX ONLY) CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES 0110 Insurance PERSONAL INJURY PERSONAL INJURY 0422 Appeal 28 USC 158 0400 State Reapportionment 0120 Marine 310 Airplane 0362 Personal Injury [3620 Other Food & Drug [3423 Withdrawal 28 USC 157 0410 Antitrust 0130 Miller Act 315 Airplane Product Med Malpractice 625 Drug Related Seizure of E3430 Banks and Banking 0140 Negotiable Instrument Liability E365 Personal Injury Property2l USC 881 E3450 Commerce/IOC Rates/etc. 0150 Recovery of Overpayment 320 Assault Libel & Product Liability [3630 Liquor Laws PROPERTY RIGHTS C3460 Deportation & Enforcement of Slander 0368 Asbestos Personal [3 640 RR 8. Truck 0470 Racketeer Influence d and Judgment 330 Federal Employers Injury Product Liability 0650 Airline Regs 0820 Copyrights Corrupt Organizations C3151 Medicare Act Liability [3660 Occupational [3830 Patent 0810 Selective Service PERSONAL PROPERTY [0152 Recovery of Defaulted 340 Marine Safety/Health [3840 Trademark 0850 Securities/Commoditles/ Student Loans (Excl 345 Marne Product 0370 Other Fraud 0690 0ther Exchange veterans) Liability E371 Truth In Lending LABOR SOCIAL SECURITY 0875 Customer Challenge X0153 Recovery of Overpayment 350 MotorVehicle 0380 Other Personal 12 USC 3410 of Veteran's Benefits 355 Motor Vehicle Property Damage Agricultural Acts 13 710 Fair Labor Standards Act [3861 HIA(1395ff) 0891 0160 Stockholders Suits Product Liabiltiy 0386 Property Damage 0892 Economic Stabilization [3720 LaborlMgmt Relations [3862 Black Lung (923) 0190 Other Contract 360 Other Personal Injury Product Liability Act [3730 Labor/Mgmt Reporting & [3863 DIWCIDIWW (405(g)) M195 Contract Product Liability 0893 Environmental Matters Disclosure Act [3864 SSID Title XVi 196 Franchise 740 Railway Labor Act 0865 RSI (405(g)) 0894 Energy Allocation Act 0895 Freedom of Information 0790 Other Labor Litigation Act REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS [3791 Empl.Ret Inc. Security FEDERAL TAX SUITS C3900 Appeal of Fee 3 210 Land Condemnation 1 Voting (]510 Motion to Vacate Act 0870 Taxes (US Plaintiff or Determination Under 71220 Foreclosure 442 Employment Sentence Habeas Corpus: Defendant Equal Access to Justice 443 Housing =230 Rent Lease & Ejectment 0630 General 13 871 IRS -Third Party X950 Constitutionality of State 444 Welfare C3 Torts to Land 0540 Death Penalty 26 USC 7609 Statutes 240 0 Other Civil Rights [3540 Mandamus & Other 0890 Other Statutory Actions = 245 Tort Product Liability 445 Amer w/ disab - Empi 3290 All Other Real Property 446 Amer w/ disab - Other CI550 Civil Rights 3480 Consumer Credit [3555 Prison Condition 490 Cable/Satellite TV
VI. CAUSE OF ACTION (CITE THE US CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE BRIEF STATEMENT OF CAUSE. DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY) The claims asserted herein arise under and pursuant to Sections 11 and 15 of the Securities Act [15 U.S.C. §§ 77k and 77o] and Sections 10 (b) and 20(a) of the Exchange Act, [15 U.S.C. §§ 78j(b) and 78t(a)], and Rule lob-5 promulgated thereunder [17 C.F.R. § 240.10b-5]. VII. REQUESTED IN COMPLAINT : m CHECK IF THIS IS A CLASS ACTION DEMAND $1ICHEECK YES only if demanded in complaint: UNDER F.R.C.P.23 JURY DEMAND:®YES q NO
VIII. RELATED CASE ( S) PLEASE REFER TO CIVIL L. R. 3-12 CONCERNING REQUIREMENT TO FILE IF ANY " NOTICE OF RELATED CASE". IX. DIVISIONAL ASSIGNMENT (CIVIL L. R. 3-2) ( PLACE AND "X" IN ONE BOX ONLY) q SAN FRANCISCO/OAKLAND q SAN JOSE DATE SIGNATURE OF ATTORNEY OF RECORD JS 44 Page 2 ( Rev. 11/04)
INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS-44 Authority For Civil Cover Sheet
The JS-44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
1. (a) Plaintiffs - Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)".
II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a). F.R.C.P., which requires that jurisdictions be shown in pleadings. Place an "X" in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; federal question actions take precedence over diversity cases.)
III. Residence (citizenship) of Principal Parties. This section of the JS-44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party.
IV. Origin. Place an "X" in one of the seven boxes.
Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. When the petition for removal is granted, check this box.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers.
Multidistrict Litigation. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. When this box is checked, do not check (5) above.
Appeal to District Judge from Magistrate Judgment. (7) Check this box for an appeal from a magistrate judge's decision.
V. Nature of Suit. Place an "X" in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section IV above, is sufficient to enable the deputy clerk or the statistical clerks in the Administrative Office to determine the nature of suit. If the cause fits more than one nature of suit, select the most definitive.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause.
VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the dollar amount (in thousands of dollars) being demanded or indicate other demand such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS-44 is used to reference related pending cases if any. If there are related pending cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature.
Date and Attorney Signature. Date and sign the civil cover sheet.