Requests for approval of class action law suits against Gilat Satellite Networks (Nasdaq: GILTF) are piling up in U.S. courts, but the latest plot twist is a suit filed today in Tel Aviv District Court in the name of an Israeli investor who acquired shares in the company.
The plaintiff claims that the company's financial reports for all of 2000 were false or at least misleading, as were reports for the first and second quarters of 2001. The investor therefore asks to be recognized as representative of a group of investors who purchased Gilat shares between May 16 2000 and October 2 2001.
As in the suits filed abroad, the defendants are the company itself, CEO Yoel Gat and CFO Yoav Libovitch. Unlike in the U.S., the Tel Aviv suit also names the company's accountants Kost Forer & Gabbay, the Israeli branch of Ernst & Young.
The class period was chosen, according to the plaintiff, because in May 2000 the company published its Q1 2000 results and in October 2001 the company published its Q3 2001 results, including "astronomical write-offs". "The content of the October 2001 reports constitutes admission of the previous reports being false or at least misleading. As a result of the false reports, the Gilat share traded at an artificially inflated value during the period," the plaintiff alleges.