Cauley & Geller, LLP Announces Class Action Lawsuit Against MTI Technology Corp. Seeking Damages On Behalf of Shareholders.

Business Editors/Legal Writers

BOCA RATON, Fla.--(BUSINESS WIRE)--Aug. 2, 2000

The Law Firm of Cauley & Geller, LLP announced today that it has filed a class action in the United States District Court for the Central District of California on behalf of all individuals and institutional investors that purchased the common stock of MTI Technology Corp. ("MTI" or the "Company") (Nasdaq: MTIC) between January 26, 2000 and July 27, 2000, inclusive (the "Class Period").

The complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information about the Company's financial condition and product demand. Specifically, the complaint alleges that during the Class Period, MTI and its top officers made very positive but false statements about the Company's financial results, the strong continuing demand for MTI's existing products and the strong bookings and order pipeline for MTI's Vivant product line, which defendants said was gaining momentum, which defendants stated gave them the ability to express comfort with analysts' estimates for earnings per share for the 4thQ of fiscal 2000 ("F00") (ended 4/1/00), for F00 and for F01 of $.13-$.14, $.60 and $.83, respectively. As a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. Prior to the disclosure of the above mentioned adverse facts, certain insiders took advantage of the inflated stock price by selling 265,000 shares of their MTI stock for proceeds of $9.0 million to the investing public. But then MTI revealed that its 4thQ F00 results were, in fact, much worse than earlier forecast due to higher than expected commissions (due to a change in the sales commission structure instituted six months earlier). MTI's stock immediately dropped, falling by almost 42% in one day to $8. However, even this disclosure did not apprise the markets as to how horrible MTI's business was and how little real demand there was for MTI's products. On 7/12/00, MTI disclosed a huge shortfall in 1stQ F01 sales, a huge loss and the resignation of its Chief Financial Officer. On this disclosure, MTI's stock dropped to as low as $5-1/4. Then, on 7/28/00, MTI announced its 1stQ F01 results, including a loss of $.27 per share and increased reserves for doubtful accounts receivable. On this news, MTI's stock dropped below $4 per share, some 93% below the Class Period high of $54-3/8.

Cauley & Geller, LLP has substantial experience representing investors in securities fraud class action lawsuits such as this. The firm has offices in Florida, Arkansas and California, but represents shareholders from throughout the nation. If you have any questions about how you may be able to recover for your losses, or if you would like to consider serving as one of the lead plaintiffs in this lawsuit, you must meet certain requirements and take appropriate action by September 29, 2000. You are encouraged to call or e-mail the Firm or visit the Firm's website at www.classlawyer.com.