Magma Design Automation Inc. NASD: LAVA

A class action lawsuit has been filed on behalf of purchasers of the securities of Magma Design Automation, Inc. ("Magma" or the "Company") (Nasdaq: LAVA) between October 23, 2002 through April 12, 2005, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act").

The complaint alleges that throughout the Class Period defendants failed to disclose that Magma faced the serious risk of infringing on intellectual property rights of competitor Synopsys, Inc. because inventions that were critical to Magma's business, and which were patented by Magma, were designed by Magma's Chief Scientist, Lukas van Ginneken, while he was employed by Synopsys. This fact, and the significant risk it posed, was known to defendants or recklessly disregarded by them, but was concealed from Magma investors. Instead of coming clean about the seriousness of the Synopsis infringement action at the time it was filed, defendants aggressively denounced the allegations, characterizing them as completely baseless. While Magma's stock price was artificially inflated (because it did not reflect the concealed risk), Magma insiders, including each of the individual defendants, sold 4,436,163 shares of Magma common stock at artificially inflated prices, reaping gross proceeds of $82,385,174.

On April 13, 2005, the truth was disclosed when the market learned that Magma's Chief Scientist admitted, in a sworn declaration filed in the Synopsys infringement action, that inventions covered by two of Magma's patents were conceived by him while he was employed by Synopsys and that his supervisor at Magma, and likely others, knew that the inventions covered by the patents were conceived by him at Synopsis and were encompassed by an agreement with Synopsis that established that it owned the rights to those inventions.

This disclosure caused Magma's stock to plummet by 40.7% in one day, from $9.42 per share on April 12, 2005 to $5.58 per share on April 13, 2005, on unusually high trading volume exceeding 14.4 million shares.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.