Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 1 of 17
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`UNITED STATES DISTRICT COURT FOR
`THE SOUTHERN DISTRICT OF NEW YORK
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`Plaintiff,
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`Case No.
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`
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`JURY TRIAL DEMANDED
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`AUSTIN COHEN,
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`
`
`
`v.
`
`
`P.
`INPHI CORPORATION, DIOSDADO
`BANATAO, DR. FORD TAMER, NICHOLAS E.
`BRATHWAITE, DR. CHENMING C. HU, DR.
`DAVID LIDDLE, DR. BRUCE MCWILLIAMS,
`ELISSA MURPHY, WILLIAM J. RUEHLE, and
`SAM S. SRINIVASAN,
`
` Defendants.
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`
`
`
`
`
`COMPLAINT FOR VIOLATION OF THE SECURITIES EXCHANGE ACT OF 1934
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`Plaintiff, Austin Cohen (“Plaintiff”), by his undersigned attorneys, for this complaint
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`against defendants, alleges upon personal knowledge with respect to himself, and upon
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`information and belief based upon, inter alia, the investigation of counsel, as to all other allegations
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`herein, as follows:
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`NATURE OF THE ACTION
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`1.
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`This is an action brought by Plaintiff against Inphi Corporation (“Inphi” or the
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`“Company”) and the members of the Company’s board of directors (collectively referred to as the
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`“Board” or the “Individual Defendants” and, together with Inphi, the “Defendants”) for their
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`violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15
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`U.S.C. §§ 78n(a), 78t(a) and Rule 14a-9, 17 C.F.R. § 240.14a-9. Plaintiff’s claims arise in connection
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`with the proposed merger between Inphi, Marvell Technology Group Ltd. (“Marvell”), Marvell
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`Technology, Inc. (“HoldCo”), a wholly-owned subsidiary of Marvell, Maui Acquisition Company
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`Ltd (“Bermuda Merger Sub”), a wholly-owned subsidiary of HoldCo, and Indigo Acquisition Corp.
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`(“Delaware Merger Sub”), another wholly-owned subsidiary of HoldCo (“Proposed Transaction”).
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`Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 2 of 17
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`Plaintiff also asserts a claim against the Individual Defendants for breaching their fiduciary duty of
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`candor/disclosure under state law.
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`2.
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`On October 29, 2020, Inphi entered into an agreement and plan of merger with
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`Marvell, HoldCo, Bermuda Merger Sub, and Delaware Merger Sub (“Merger Agreement”),
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`whereby: (i) Bermuda Merger Sub will be merged with and into Marvell, with Marvell continuing as
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`a wholly-owned subsidiary of HoldCo; and (ii) Delaware Merger Sub will be merged with and into
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`Inphi, with Inphi continuing as a wholly-owned subsidiary of HoldCo.
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`3.
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`Upon consummation of the Proposed Transaction, each share of Inphi common stock
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`will be converted into the right to receive: (i) $66.00 in cash; and (ii) 2.323 shares of HoldCo common
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`stock (“Merger Consideration”).
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`4.
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`On December 22, 2020, in order to convince Inphi public common shareholders to
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`vote in favor of the Proposed Transaction, the Defendants authorized the filing of a materially
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`incomplete and misleading Form S-4 Registration Statement (“Registration Statement”) with the
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`SEC, in violation of Sections 14(a) and 20(a) of the Exchange Act.
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`5.
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`In particular, the Registration Statement contains materially incomplete and
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`misleading information concerning: (i) the financial projections prepared by Inphi management; and
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`(ii) the valuation analyses performed by the Company’s financial advisor, Qatalyst Partners LP
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`(“Qatalyst Partners”).
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`6.
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`The Proposed Transaction is expected to close in the second half of 2021, so the special
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`meeting of Inphi shareholders to vote on the Proposed Transaction is imminent (“Shareholder Vote”).
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`Therefore, it is imperative that the material information omitted from the Registration Statement be
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`disclosed prior to the Shareholder Vote, so Inphi’s shareholders can properly exercise their corporate
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`voting rights.
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`7.
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`For these reasons, and as set forth in detail herein, Plaintiff asserts claims against
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`Defendants for violations of Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9. Plaintiff
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`seeks to enjoin Defendants from taking any steps to consummate the Proposed Transaction, unless
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`and until the material information discussed below is disclosed to Inphi shareholders sufficiently in
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`advance of the upcoming Shareholder Vote or, in the event the Proposed Transaction is consummated,
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`to recover damages resulting from the Defendants’ violations of the Exchange Act.
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`JURISDICTION AND VENUE
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`8.
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`This Court has jurisdiction over all claims asserted herein pursuant to Section 27 of
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`the 1934 Act because the claims asserted herein arise under Sections 14(a) and 20(a) of the 1934 Act
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`and Rule 14a-9.
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`9.
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`Personal jurisdiction exists over each Defendant either because the Defendant
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`conducts business in or maintains operations in this District, or is an individual who is either present
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`in this District for jurisdictional purposes or has sufficient minimum contacts with this District as to
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`render the exercise of jurisdiction over each Defendant by this Court permissible under the traditional
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`notions of fair play and substantial justice. “Where a federal statute such as Section 27 of the
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`[Exchange] Act confers nationwide service of process, the question becomes whether the party has
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`sufficient contacts with the United States, not any particular state.” Sec. Inv’r Prot. Corp. v. Vigman,
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`764 F.2d 1309, 1315 (9th Cir. 1985). “[S]o long as a defendant has minimum contacts with the United
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`States, Section 27 of the Act confers personal jurisdiction over the defendant in any federal district
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`court.” Id. at 1316.
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`10.
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`Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. §
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`78aa, as well as 28 U.S.C. § 1391, because Defendants are found or are inhabitants or transact
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`business in this District. Indeed, Inphi’s common stock trades on the NasdaqGS, which is
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`headquartered in this District. See, e.g., United States v. Svoboda, 347 F.3d 471, 484 n.13 (2d Cir.
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`2003) (collecting cases). In addition, the Company’s proxy solicitor, Mackenzie Partners, Inc. is
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`Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 4 of 17
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`located in this District at 1407 Broadway, New York, NY 10018.
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`PARTIES
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`11. Plaintiff is, and has been continuously throughout all times relevant hereto, the owner
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`of Inphi common stock.
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`12. Defendant Inphi is a public company incorporated under the laws of Delaware with
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`principal executive offices located at 110 Rio Robles, San Jose, CA 95134. Inphi’s common stock
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`trades on the NasdaqGS under the ticker symbol “IPHI.”
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`13. Defendant Diosdado P. Banatao is, and has been at all relevant times, a director of the
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`Company and Chairman Emeritus of its Board.
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`14. Defendant Dr. Ford Tamer is, and has been at all relevant times, a director of the
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`Company, its President, and Chief Executive Officer.
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`15. Defendant Nicholas E. Brathwaite is, and has been at all relevant times, a director of
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`the Company.
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`16. Defendant Dr. Chenming C. Hu is, and has been at all relevant times, a director of the
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`Company.
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`17. Defendant Dr. David Liddle is, and has been at all relevant times, a director of the
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`Company.
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`18. Defendant Dr. Bruce McWilliams is, and has been at all relevant times, a director of
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`the Company.
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`19. Defendant Elissa Murphy is, and has been at all relevant times, a director of the
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`Company.
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`20. Defendant William J. Ruehle is, and has been at all relevant times, a director of the
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`Company.
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`21. Defendant Sam S. Srinivasan is, and has been at all relevant times, a director of the
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`Company.
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`22. The defendants identified in paragraphs 13 through 21 are collectively referred to
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`herein as the “Board” or the “Individual Defendants,” and together with the Company, the
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`“Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background of the Company, Marvell, and the Proposed Transaction
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`23.
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`Inphi provides high-speed analog and mixed signal semiconductor solutions for the
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`communications, datacenter, and computing markets in China, the United States, Thailand, and
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`internationally. Its analog and mixed signal semiconductor solutions offer high signal integrity at
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`various data speeds and reduce system power consumption. The Company’s semiconductor solutions
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`address bandwidth bottlenecks in networks, maximize throughput and minimize latency in computing
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`environments, and enable the rollout of communications and datacenter infrastructures. Its solutions
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`provide a high-speed interface between analog and mixed signals, and digital information in high-
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`performance systems, such as telecommunications transport systems, enterprise networking
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`equipment, and data centers. The Company also provides 25G to 600G high-speed analog and mixed
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`semiconductor solutions for the communications market. Its products perform a range of functions,
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`such as amplifying, encoding, multiplexing, demultiplexing, and retiming signals at speeds up to 400
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`Gbps. Inphi sells its products directly through its sales force, as well as through a network of sales
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`representatives and distributors to original equipment manufacturers.
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`24. Marvell first revolutionized the digital storage industry by moving information at
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`speeds never thought possible. Today, that same breakthrough innovation remains at the heart of the
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`company’s storage, processing, networking, security and connectivity solutions. With leading
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`intellectual property and deep system-level knowledge, Marvell’s semiconductor solutions continue
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`to transform the enterprise, cloud, automotive, industrial and consumer markets.
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`25. According to the October 29, 2020, joint press release announcing the Proposed
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`Transaction:
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`Marvell to Acquire Inphi – Accelerating Growth and Leadership in Cloud and
`5G Infrastructure
`SANTA CLARA, Calif. and SAN JOSE, Calif., Oct. 29, 2020 /PRNewswire/ -
`- Marvell Technology Group Ltd. (NASDAQ: MRVL), a leader in infrastructure
`semiconductor solutions, and Inphi Corporation (NASDAQ: IPHI), a leader in
`high-speed data movement,
`today announced a definitive agreement,
`unanimously approved by the boards of directors of both companies, under
`which Marvell will acquire Inphi in a cash and stock transaction. In conjunction
`with the transaction, Marvell intends to reorganize so that the combined company
`will be domiciled
`in the United States, creating a U.S. semiconductor
`powerhouse with an enterprise value of approximately $40 billion.
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`Inphi has built a leading high-speed data interconnect platform uniquely suited to
`meet the insatiable demand for increased bandwidth and low power for the cloud
`data centers and global networks of the future. Inphi's high-speed electro-optics
`portfolio provides the connectivity fabric for cloud data centers and wired and
`wireless carrier networks, just as Marvell's copper physical layer portfolio does
`for enterprise and future in-vehicle networks. Combining Marvell's storage,
`networking, processor, and security portfolio, with Inphi's leading electro-optics
`interconnect platform, will position the combined company for end-to-end
`technology leadership in data infrastructure. This highly complementary
`transaction expands Marvell's addressable market, strengthens customer base,
`and accelerates Marvell's leadership in hyperscale cloud data centers and 5G
`wireless infrastructure.
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`Today's machine learning and other data-driven workloads have expanded
`beyond the confines of the server and now span the entire cloud data center,
`making the software-defined data center the new computing paradigm. This trend
`drives hyper-connectivity within the data center, putting electro-optical
`interconnects at the heart of the cloud architecture. In addition, the need for
`bandwidth between data centers continues to grow at astounding rates. Combined
`with explosive Internet traffic growth and the rollout of new ultra-fast 5G wireless
`networks, the importance of Inphi's high-speed data interconnect solutions will
`only accelerate. The combined company will be uniquely positioned to serve the
`data-driven world, addressing high growth, attractive end markets – cloud
`datacenter and 5G.
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`Our combined scale will provide more resources and capabilities to continue to
`invest and better manage the rapidly ramping process technology costs. The
`transaction is expected to generate annual run-rate synergies of $125 million to
`be realized within 18 months after the transaction closes and is expected to
`become accretive to Marvell's non-GAAP earnings per share by the end of the
`first year after the transaction closes.
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`"Our acquisition of Inphi will fuel Marvell's leadership in the cloud and extend
`our 5G position over the next decade," said Matt Murphy, president and CEO
`of Marvell. "Inphi's technologies are at the heart of cloud data center networks
`and they continue to extend their leadership with innovative new products,
`including 400G data center interconnect optical modules, which leverage their
`unique silicon photonics and DSP technologies. We believe that Inphi's growing
`presence with cloud customers will also lead to additional opportunities
`for Marvell's DPU and ASIC products."
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`"Marvell and Inphi share a vision to enable the world's data infrastructure and we
`have both transformed our respective businesses to benefit from the strong secular
`growth expected in the cloud data center and 5G wireless markets," said Ford
`Tamer, President and CEO of Inphi. "Combining with Marvell significantly
`increases our scale, accelerates our access to the next generations of process
`technology, and opens up new opportunities in 5G connectivity."
`Upon closing, Ford Tamer, Inphi's President and CEO, will join Marvell's Board
`of Directors.
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`(Emphasis in original).
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`26. The Merger Consideration represents inadequate compensation for Inphi shareholders.
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`Registration Statement, 118.
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`27. Therefore, it is imperative that the Company’s shareholders receive the material
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`information (discussed in detail below) that Defendants have omitted from the Registration
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`Statement, which is necessary for them to properly exercise their corporate suffrage rights and cast
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`an informed vote on the Proposed Transaction.
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`The Registration Statement Omits Material Information
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`28.
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`Defendants filed a materially incomplete and misleading Registration Statement with
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`the SEC, despite the Individual Defendants being obligated to carefully review the Registration
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`Statement before it was filed and disseminated to the Company’s shareholders, to ensure that it did
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`not contain any material misrepresentations or omissions. Therefore, the Registration Statement
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`should be amended prior to the Shareholder Vote, so the Company’s shareholders can make an
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`informed voting decision in connection with the Proposed Transaction.
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`29.
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`First, the Registration Statement fails to provide critical information regarding the
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`Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 8 of 17
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`financial projections prepared by Inphi management.
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`30.
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`Specifically, Defendants elected to include the “Inphi Projections” and the “Pro Forma
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`Financial Information” projections prepared by management, while excluding Net Income
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`projections for Inphi and the Pro Forma Combined Company (“Net Income Projections”), despite
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`references to Net Income for both throughout the Registration Statement. Registration Statement, 52-
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`53, 56-57, 234-235. By disclosing certain projections in the Registration Statement and withholding
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`the Net Income Projections, Defendants render the projections on pages 125 and 127 of the
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`Registration Statement materially incomplete and provide a misleading valuation picture of Inphi and
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`the Pro Forma Combined Company. Simply put, Net Income projections are irreplaceable when it
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`comes to fully, fairly, and accurately understanding a company’s projections and value.
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`31.
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`Unlike poker where a player must conceal his unexposed cards, the object of a
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`registration statement is to put all of one’s cards on the table face-up. In this case, only some of the
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`cards were exposed—the others were concealed. If a registration statement discloses financial
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`projections and valuation information, such projections must be complete and accurate. The question
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`here is not the duty to speak, but liability for not having spoken enough. With regard to future events,
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`uncertain figures, and other so-called soft information, a company may choose silence or speech
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`elaborated by the factual basis as then known—but it may not choose half-truths. See Campbell v.
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`Transgenomic, et al., No. 18-2198 (8th Cir., March 1, 2019) (noting that “half-truths” are actionable
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`misrepresentations under securities laws and collecting cases). Accordingly, Defendants have
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`disclosed some of the projections, but have omitted the Net Income Projections.
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`32.
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`Second, the Registration Statement omits material information regarding Qatalyst
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`Partners’ financial analyses with respect to the Proposed Transaction.
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`33.
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`The Registration Statement states that Qatalyst Partners utilized the “Analyst
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`Projections” in performing its financial analyses, yet the Registration Statement does not disclose
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`these referenced Analyst Projections. Registration Statement, 116, 119-20.
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`34.
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`Additionally, the Registration Statement provides that Qatalyst Partners utilized the
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`“Adjusted Marvell Projections” in performing its financial analyses in connection with the Proposed
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`Transaction. Id. at 115. However, the Registration Statement does not disclose these projections. If
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`Defendants intended to reference the “Marvel Projections” on page 126 of the Registration Statement
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`that were adjusted by Inphi management, then this must be clarified in an amendment to the
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`Registration Statement – otherwise Defendants must disclose the “Adjusted Marvell Projections”
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`referenced.
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`35. With respect to Qatalyst Partners’ Illustrative Discounted Cash Flow Analysis for the
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`Standalone Company, the Registration Statement omits: (i) the inputs and assumptions underlying
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`the range of discount rates of 8.0% to 11.5% (based on an estimated weighted average cost of capital
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`for Inphi); (ii) the terminal value of Inphi; (iii) the inputs and assumptions underlying a range of
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`multiples of fully-diluted enterprise value to next-twelve-months NOPAT of 20.0x to 35.0x; and (iv)
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`the number of fully diluted Inphi shares as of December 31, 2020. Id. at 116-17.
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`36.
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`As for the Illustrative Discounted Cash Flow Analysis for the Pro Forma Combined
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`Company, the Registration Statement omits: (i) the inputs and assumptions underlying the range of
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`discount rates of 8.0% to 10.0% (based on an estimated weighted average cost of capital for HoldCo,
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`taking into account the mergers); (ii) the terminal value of HoldCo, taking into account the mergers;
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`(iii) the inputs and assumptions underlying a range of multiples of fully-diluted enterprise value to
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`next-twelve-months NOPAT of 20.0x to 35.0x; and (iv) the number of fully diluted HoldCo shares
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`taking into account the mergers, as of December 31, 2020. Id. at 117-18.
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`37.
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`These key inputs are material to Inphi shareholders, and their omission renders the
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`summary of Qatalyst Partners’ Illustrative Discounted Cash Flow Analyses incomplete and
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`misleading. As one highly-respected law professor explained regarding these crucial inputs, in a
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`discounted cash flow analysis a banker takes management’s forecasts, and then makes several key
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`choices “each of which can significantly affect the final valuation.” Steven M. Davidoff, Fairness
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`Opinions, 55 Am. U.L. Rev. 1557, 1576 (2006). Such choices include “the appropriate discount rate,
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`and the terminal value…” Id. As Professor Davidoff explains:
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`There is substantial leeway to determine each of these, and any change can
`markedly affect the discounted cash flow value. For example, a change in
`the discount rate by one percent on a stream of cash flows in the billions of
`dollars can change the discounted cash flow value by tens if not hundreds
`of millions of dollars….This issue arises not only with a discounted cash
`flow analysis, but with each of the other valuation techniques. This dazzling
`variability makes it difficult to rely, compare, or analyze the valuations
`underlying a fairness opinion unless full disclosure is made of the various
`inputs in the valuation process, the weight assigned for each, and the
`rationale underlying these choices. The substantial discretion and lack of
`guidelines and standards also makes the process vulnerable to manipulation
`to arrive at the “right” answer for fairness. This raises a further dilemma in
`light of the conflicted nature of the investment banks who often provide
`these opinions.
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`Id. at 1577-78 (emphasis added). Without the above-mentioned information, Inphi’s
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`shareholders cannot evaluate for themselves the reliability of Qatalyst Partners’ Illustrative
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`Discounted Cash Flow Analyses, make a meaningful determination of whether the implied equity
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`value ranges reflect the true value of the Company or were the result of an unreasonable judgment by
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`Qatalyst Partners, and make an informed decision regarding whether to vote their shares in favor of
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`the Proposed Transaction.
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`38.
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`Regarding Qatalyst Partners’ Selected Companies Analysis, the Registration
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`Statement fails to disclose the inputs and assumptions underlying the selected representative range of
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`20.0x to 40.0x. Registration Statement, 118-19.
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`39.
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`Similarly, the Selected Transactions Analysis omits the inputs and assumptions
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`underlying Qatalyst Partners’: (i) selected representative range of 5.5x to 11.0x applied to Inphi’s
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`estimated next-twelve-months revenue; and (ii) selected representative range of 20.0x to 37.0x
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`applied to Inphi’s estimated next-twelve-months non-GAAP earnings per diluted share excluding
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`stock-based compensation expense, acquisition expenses, amortization of intangibles, inventory fair
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`value step up related to acquisitions, noncash interest on convertible debt and other non-
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`recurring charges. Id. at 119-20.
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`40.
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`In sum, the omission of the above-referenced information renders the Registration
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`Statement materially incomplete and misleading, in contravention of the Exchange Act. Absent
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`disclosure of the foregoing material information prior to the upcoming Shareholder Vote concerning
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`the Proposed Transaction, Plaintiff will be unable to make an informed decision regarding whether
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`to vote his shares in favor of the Proposed Transaction, and he is thus threatened with irreparable
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`harm, warranting the injunctive relief sought herein.
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` CAUSES OF ACTION
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`COUNT I
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`(Against All Defendants for Violations of Section 14(a) of the Exchange Act and Rule 14a-9)
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`41.
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`Plaintiff incorporates each and every allegation set forth above as if fully set forth
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`herein.
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`42.
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`Section 14(a)(1) of the Exchange Act makes it “unlawful for any person, by the use of
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`the mails or by any means or instrumentality of interstate commerce or of any facility of a national
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`securities exchange or otherwise, in contravention of such rules and regulations as the Commission
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`may prescribe as necessary or appropriate in the public interest or for the protection of investors, to
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`solicit or to permit the use of his name to solicit any proxy or consent or authorization in respect of
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`any security (other than an exempted security) registered pursuant to section 78l of this title.” 15
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`U.S.C. § 78n(a)(1).
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`43.
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`Rule 14a-9, promulgated by the SEC pursuant to Section 14(a) of the Exchange Act,
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`provides that proxy communications shall not contain “any statement which, at the time and in the
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`light of the circumstances under which it is made, is false or misleading with respect to any material
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`fact, or which omits to state any material fact necessary in order to make the statements therein not
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`false or misleading.” 17 C.F.R. § 240.14a-9.
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`44.
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`The omission of information from a registration statement will violate Section 14(a)
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`and Rule 14a-9 if other SEC regulations specifically require disclosure of the omitted information.
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`45.
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`Defendants have issued the Registration Statement with the intention of soliciting the
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`Company’s public common stockholders support for the Proposed Transaction. Each of the
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`Individual Defendants reviewed and authorized the dissemination of the Registration Statement,
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`which fails to provide critical information regarding, amongst other things: (i) the financial
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`projections prepared by Inphi managemnent; and (ii) the valuation analyses performed by Qatalyst
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`Partners in connection with the Proposed Transaction.
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`46.
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`In so doing, Defendants made untrue statements of fact and/or omitted material facts
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`necessary to make the statements made not misleading. Each of the Individual Defendants, by virtue
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`of their roles as officers and/or directors, were aware of the omitted information but failed to disclose
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`such information, in violation of Section 14(a). The Individual Defendants were therefore negligent,
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`as they had reasonable grounds to believe material facts existed that were misstated or omitted from
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`the Registration Statement, but nonetheless failed to obtain and disclose such information to the
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`Company’s shareholders although they could have done so without extraordinary effort.
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`47.
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`The Individual Defendants knew or were negligent in not knowing that the
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`Registration Statement is materially misleading and omits material facts that are necessary to render
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`it not misleading. The Individual Defendants undoubtedly reviewed and relied upon most if not all
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`of the omitted information identified above in connection with their decision to approve and
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`recommend the Proposed Transaction; indeed, the Registration Statement states that Qatalyst Partners
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`reviewed and discussed its financial analyses with the Individual Defendants, and further states that
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`the Individual Defendants considered the financial analyses provided by Qatalyst Partners, as well as
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`Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 13 of 17
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`its fairness opinion and the assumptions made and matters considered in connection therewith.
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`Further, the Individual Defendants were privy to and had knowledge of the projections for the
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`Company and the details surrounding the process leading up to the signing of the Merger Agreement.
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`The Individual Defendants knew or were negligent in not knowing that the material information
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`identified above has been omitted from the Registration Statement, rendering the sections of the
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`Registration Statement identified above to be materially incomplete and misleading. Indeed, the
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`Individual Defendants were required to, separately, review Qatalyst Partners’ analyses in connection
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`with their receipt of the fairness opinions, question Qatalyst Partners as to its derivation of fairness,
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`and be particularly attentive to the procedures followed in preparing the Registration Statement and
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`review it carefully before it was disseminated, to corroborate that there are no material misstatements
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`or omissions.
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`48.
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`The Individual Defendants were, at the very least, negligent in preparing and
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`reviewing the Registration Statement. The preparation of a registration statement by corporate
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`insiders containing materially false or misleading statements or omitting a material fact constitutes
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`negligence. The Individual Defendants were negligent in choosing to omit material information from
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`the Registration Statement or failing to notice the material omissions in the Registration Statement
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`upon reviewing it, which they were required to do carefully as the Company’s directors. Indeed, the
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`Individual Defendants were intricately involved in the process leading up to the signing of the Merger
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`Agreement and preparation and review of the Company’s financial projections.
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`49.
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`Inphi is also deemed negligent as a result of the Individual Defendants’ negligence in
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`preparing and reviewing the Registration Statement.
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`50.
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`The misrepresentations and omissions in the Registration Statement are material to
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`Plaintiff, who will be deprived of his right to cast an informed vote if such misrepresentations and
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`omissions are not corrected prior to the Shareholder Vote. Plaintiff has no adequate remedy at law.
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`
`
`13
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`Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 14 of 17
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`Only through the exercise of this Court’s equitable powers can Plaintiff be fully protected from the
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`immediate and irreparable injury that Defendants’ actions threaten to inflict.
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`COUNT II
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` (Against the Individual Defendants for Violations of Section 20(a) of the Exchange Act)
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`51.
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`Plaintiff incorporates each and every allegation set forth above as if fully set forth
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`herein.
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`52.
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`The Individual Defendants acted as controlling persons of Inphi within the meaning
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`of Section 20(a) of the Exchange Act as alleged herein. By virtue of their positions as officers and/or
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`directors of Inphi, and participation in and/or awareness of the Company’s operations and/or intimate
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`knowledge of the incomplete and misleading statements contained in the Registration Statement filed
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`with the SEC, they had the power to influence and control and did influence and control, directly or
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`indirectly, the decision making of the Company, including the content and dissemination of the
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`various statements that Plaintiff contends are materially incomplete and misleading.
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`53.
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`Each of the Individual Defendants was provided with or had unlimited access to copies
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`of the Registration Statement and other statements alleged by Plaintiff to be misleading prior to and/or
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`shortly after these statements were issued and had the ability to prevent the issuance of the statements
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`or cause the statements to be corrected.
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`54.
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`In particular, each of the Individual Defendants had direct and supervisory
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`involvement in the day-to-day operations of the Company, and, therefore, is presumed to have had
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`the power to control or influence the particular transactions giving rise to the Exchange Act violations
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`alleged herein, and exercised the same. The Registration Statement contains the unanimous
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`recommendation of each of the Individual Defendants to approve the Proposed Transaction. They
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`were thus directly involved in preparing this document.
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`55.
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`In addition, as the Registration Statement sets forth at length, and as described herein,
`
`
`
`14
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`Case 1:21-cv-00082 Document 1 Filed 01/05/21 Page 15 of 17
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`the Individual Defendants were involved in negotiating, reviewing, and approving the Merger
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`Agreement. The Registration Statement purports to describe the various issues and information that
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`the Individual Defendants reviewed and considered. The Individual Defendants participated in
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`drafting and/or gave their input on the content of those descriptions.
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`56.
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`By virtue of the foregoing, the Individual Defendants have violated Section 20(a) of
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`the Exchange Act.
`
`57.
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`As set forth above, the Individual Defendants had the ability to exercise control over
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`and did control a person or persons who have each violated Section 14(a) and Rule 14a-9 by their
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`acts and omissions as alleged herein. By virtue of their positions as controlling persons, these
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`defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result
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`of Individual Defendants’ conduct, Plaintiff will be irreparably harmed.
`
`58.
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`Plaintiff has no adequate remedy at law. Only through the exercise of this Court’s
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`equitable powers can Plaintiff be fully protected from the immediate and irreparable injury that
`
`Defendants’ actions threaten to inflict.
`
`COUNT III
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`(Against the Individual Defendants for Breach of Fiduciary Duty of Candor/Disclosure)
`
`
`
`59.
`
`Plaintiff incorporates each and every allegation set forth above as if fully set forth
`
`herein.
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`60.
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`By virtue of their role as directors and/or officers of the Co