Case Update - 05/21/2009

On March 10, 2009, the lead plaintiff filed a Second Amended Consolidated Class Action Complaint after on August 28, 2008, the defendants PricewaterhouseCoopers LLP, Leap Wireless International, Inc., and the individual defendants had filed three separate motions to dismiss the Consolidated Class Action Complaint and on January 9, 2009, the District Court Judge issued three orders granting the defendants’ three motions to dismiss the consolidated class action complaint without prejudice. An investor had filed back in 2007 a securities class action lawsuit on behalf of certain investors over alleged Securities laws violations by Leap Wireless International, Inc.

According to the original complaint, filed in U.S. District Court in San Diego in 2007, the plaintiff alleges that Leap and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Specifically, the complaint alleges that between 05/16/2005 and 11/09/2007 defendants issued materially false and misleading statements regarding the Company’s business, prospects and financial results. As a result of defendants’ false statements, Leap stock traded at artificially inflated prices during the Class Period, reaching its all-time high of $98.33 per share in July 2007. On August 7, 2007, Leap announced disastrous second quarter 2007 results, including missing its revenue projections, soaring expenses and a high customer turnover rate, causing its stock to decline from $80.36 per share on August 7, 2007 to $60.00 per on August 8, 2007 – a one-day decline of 25%. Then, on November 9, 2007, before the market opened, defendants disclosed that Leap would be required to restate its financial statements for fiscal years 2004, 2005, 2006 and for the first and second quarters of fiscal year 2007 to correct for errors in its previously reported service revenues, equipment revenues and operating expenses, causing its stock to drop $21.38 per share. According to the complaint, the true facts, which were known by the defendants but concealed from the investing public between 05/16/2005 and 11/09/2007. On May 22, 2008 the U.S. District Judge granted the motions to consolidate several actions and on July 7, 2008, the plaintiff filed a Consolidated Class Action Complaint. Then on August 28, 2008, the defendants PricewaterhouseCoopers LLP, Leap Wireless International, Inc., and the individual defendants filed three separate motions to dismiss the Consolidated Class Action Complaint and on January 9, 2009, the District Court Judge issued three orders granting the defendants’ three motions to dismiss the consolidated class action complaint without prejudice.

Original Post - 11/26/2008

According to a law frim press release dated November 29, 2007 a class action has been commenced on behalf of purchasers of Leap Wireless International, Inc. common stock.

The complaint charges Leap and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Leap is a wireless communications carrier that offers digital wireless service under the Cricket Communications, Inc. and Jump Mobile brands in the United States.

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business, prospects and financial results. As a result of defendants’ false statements, Leap stock traded at artificially inflated prices during the Class Period, reaching its all-time high of $98.33 per share in July 2007.

On August 7, 2007, Leap announced disastrous second quarter 2007 results, including missing its revenue projections, soaring expenses and a high customer turnover rate, causing its stock to decline from $80.36 per share on August 7, 2007 to $60.00 per on August 8, 2007 – a one-day decline of 25%. Then, on November 9, 2007, before the market opened, defendants disclosed that Leap would be required to restate its financial statements for fiscal years 2004, 2005, 2006 and for the first and second quarters of fiscal year 2007 to correct for errors in its previously reported service revenues, equipment revenues and operating expenses, causing its stock to drop $21.38 per share.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Company’s financial statements were materially misstated due to its failure to properly account for its service revenue in violation of Generally Accepted Accounting Principles (“GAAP”); (b) the Company’s financial statements were materially misstated due to its failure to properly account for its equipment revenue and cost of equipment in violation of GAAP; (c) the Company lacked requisite internal controls, and, as a result, the Company’s projections and reported results issued during the Class Period were based upon defective assumptions and/or manipulated facts; and (d) given the Company’s exposure to subprime consumers and the intense competition in the low-cost cell carriers market Leap was facing, the Company had no reasonable basis to make projections about its ability to maintain its customer turnover rate and net customer additions. As a result, the Company’s projections issued during the Class Period were at a minimum reckless.