3Com insiders accused of dodgy dealing

NEWS A US law firm has launched a class-action lawsuit against networking giant, 3Com, accusing company insiders of inflating the firm's share price by releasing misleading statements to investors. Atlanta firm, Chitwood & Harley, claims that between September and March, 3Com insiders are alleged to have used $130m of company funds to repurchase shares, subsequently reaping profits of $189m in reselling the stock. 3Com's share price rose from $23 at the start of September to $51 in December. After a fall in February, the plaintiffs claim false reassurances were given, which boosted the share price until poor sales were announced in March. If the claim is proved, 3Com could face a sizeable damages bill to compensate investors who lost money during the period. Chitwood & Harley said it is bringing the suit on behalf of members of the public who claim they have been damaged by the purchase of common stock. In a statement, 3Com insisted it has fully complied in good faith with US federal and state securities laws, and said it will vigorously contest the claims.