Wechsler Harwood Commences Securities Class Action Against VA Linux Systems, Inc. (Nasdaq: LNUX)

The following is an announcement by law firm Wechsler Harwood Halebian & Feffer LLP. (http://www.whhf.com/). Wechsler Harwood Halebian & Feffer LLP has been engaged to commence a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired VA Linux Systems, Inc. ("VA Linux" or the "Company") common stock on December 9, 1999, in the VA Linux initial public offering ("IPO") or between the period December 9, 1999, and December 6, 2000, (the "Traceable Period").

The complaint charges VA Linux and certain of its officers and directors, along with Credit Suisse First Boston Corporation ("Credit Suisse") with violations of the federal securities laws. Specifically, the complaint alleges violation of sections 11, 12(a) (2) and 15 of the Securities Act of 1933 and section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

On December 9, 1999, Linux completed the IPO when it sold 4.4 million shares of common stock at an offering price of $30 per share ("VA Linux IPO"). In connection with the IPO, Linux filed a registration statement, which incorporated a prospectus (the "Prospectus"), with the SEC.

The complaint alleges that the Prospectus was materially false and misleading because it failed to disclose that Credit Suisse solicited and received excessive and undisclosed commissions from certain investors in exchange for Credit Suisse allocating to those investors material portions of the restricted number of VA Linux shares issued in connection with the VA Linux IPO.

The Complaint also alleges that Credit Suisse entered into agreements with customers whereby Credit Suisse agreed to allocate VA Linux shares to those customers in the VA Linux IPO in exchange for which those customers agreed to purchase additional VA Linux shares in the aftermarket at pre-determined prices. As alleged in the complaint, the SEC is investigating underwriting practices in connection with several other initial public offerings, including the VA Linux IPO.

Plaintiff seeks to recover damages on behalf of all class members who purchased VA Linux securities in the IPO of VA Linux common stock on or about December 9, 1999, (the "IPO"), or traceable thereto and who suffered damages. Plaintiffs are represented by the law firm of Wechsler Harwood Halebian & Feffer LLP which has extensive experience representing shareholders in class actions and has been recognized as able practitioners by the courts.

If you acquired VA Linux securities in the IPO or during the Traceable Period, you have until March 12, 2001, to participate in the case and ask the Court to appoint you as one of the lead plaintiffs for the Class. In order to serve as lead plaintiff, you must meet certain legal requirements. If you wish to discuss this action or have any questions, please contact:

  Wechsler Harwood Halebian & Feffer LLP
  488 Madison Avenue - 8th Floor
  New York, New York 10022
  Telephone: (877) 935-7400 (toll free)
  Facsimile: (212) 753-3630

  Patricia Guiteau, Shareholder Relations Department:
  pguiteau@whhf.com

SOURCE: Wechsler Harwood Halebian & Feffer LLP

Contact: Patricia Guiteau, Shareholder Relations Department of Wechsler
Harwood Halebian & Feffer LLP, toll free - 877-935-7400, fax - 212-753-3630,
pguiteau@whhf.com

Website: http://www.whhf.com/