Magma Design Automation, Inc.

Company Name
Magma Design Automation, Inc.
Stock Symbol
LAVA
Class Period
October 23, 2002 to April 12, 2005
Court
Northern District of California
Status
Settled

This action is brought on behalf of public investors who acquired securities of Magma Design Automation, Inc. during the period October 23, 2002 through April 12, 2005, inclusive. The Complaint charges Magma and certain of the Company’s executive officers with violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and S.E.C. Rule 10b-5. The Complaint alleges that during the Class Period defendants failed to disclose that: (a) inventions critical to Magma's business, and claimed by Magma in certain patents, actually were conceived by Magma's chief scientist while he was employed by Magma’s competitor Synopsys, Inc.; (b) as a result, Magma’s use of the patented technology ran the serious but undisclosed risk of infringing Synopsys’ intellectual property rights; (c) Magma’s incorporation of the technology encompassed by the relevant patents could be halted, thereby jeopardizing the Company’s business; and (d) Magma could be subject to a material monetary judgment in an infringement action brought by Synopsys.