Wave Systems Corp. (fka WAVXQ)

[SPIN]

"...even if it is sometimes as hard to get a straight answer out of [SKS]."

speaking of, curious omission in the 10Q:

7.                    Contingencies
 
Securities and Exchange Commission Investigation
 
On December 17, 2003 Wave received an Order by the Securities and Exchange Commission (the “Commission”) regarding a formal investigation.  The focus of this investigation is on certain public statements made by Wave during and around August 2003, as well as certain trading in Wave’s securities during such time.  The Commission has not concluded that there has been any wrongdoing and Wave is cooperating fully with the Commission on this matter.  Wave cannot predict the potential effect on Wave as a result of this investigation at this time.
 
Purported Class Actions
 
Several (9 known) similar purported class action complaints have been filed between January 23, 2004 and February 23, 2004 most in the United States District Court for the District of Massachusetts, seven (7) of which name Wave, its Chief Executive Officer, its Chief Financial Officer and two (2) of which also name Wave’s Chairman of the Board, as defendants.
 
The purported class action complaints have been filed by alleged purchasers of Wave’s Class A Common Stock during the purported class period July 31, 2003 through February 2, 2004.  The complaints claim that Wave and the named individuals violated the federal securities laws by publicly disseminating materially false and misleading statements regarding Wave, relating to Intel and IBM agreements, resulting in the artificial inflation of Wave’s Class A Common Stock price during the purported class periods.  The complaints do not specify the amount of alleged damages plaintiffs seek to recover.
 
9
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Wave intends to defend the actions vigorously.  At this time, Wave is unable to predict the outcome of these actions.
 
Derivative Actions
 
Wave has learned of three (3) other complaints filed in the United States District Court for the District of Massachusetts.  Wave believes that the complaints name all of its directors as defendants and allege claims for breach of fiduciary duties and other claims.  The allegations are very similar to the allegations made in the purported securities class actions because the allegations concern the very same alleged statements alleged in the purported class actions.  Wave is also named as a nominal defendant, although the actions are derivative in nature and purportedly asserted on behalf of Wave.  Wave is in the process of evaluating these claims.
 
Wave intends to defend the actions vigorously.  At this time, Wave is unable to predict the outcome of these actions.



SO, why did Wave fail to mention that the claims specifically allege insider selling of millions of artificially inflated shares as a result of the alleged public dissemination of materially false and misleading statements?