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In June 2003, former Cree CEO and co-founder Eric Hunter accused Cree Inc. and its chairman, his brother F. Neal Hunter, of securities-related and corporate wrongdoing. Cree rejected the allegations. The Hunters’ lawsuit ended in a settlement and dismissal in November 2003; the cited record does not establish the accusations as true or false.
What Eric Hunter alleged in June 2003
EE Times reported on June 26, 2003, that Eric Hunter had sued Cree and F. Neal Hunter earlier that month. Hunter alleged that Cree and its chairman made false or misleading statements in securities filings, left material information out of earnings statements, and misled auditors about income paid to officers and directors. Cree dismissed the allegations. These were claims by Hunter and his complaint, not findings of misconduct.
Hunter rejected reports that he was receiving psychiatric treatment or had been prescribed antipsychotic medication. He also said that his and his wife Jocelyn’s business and personal interests in North Carolina’s Triangle region had been harmed by what he described as harassment by Cree’s chairman. Those were Hunter’s denials and claims, not independently verified medical or damages findings.
He explicitly rejected the “family feud” description, saying: “This is not a story about a family feud, but a story about alleged stock fraud at Cree Inc., insider trading, and a coverup that will likely lead to a restatement of financial results for at least the last 4-1/2 years,” according to EE Times. The quote reflects Hunter’s allegations and prediction, not a court’s conclusion. EE Times’ June 26, 2003 report
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The C3 equipment transaction Hunter cited
Hunter also alleged that Cree bought $5 million of equipment from C3 in May 2000, after Cree’s January 2000 secondary offering of $300 million. He said the arrangement provided C3 with funds to keep buying moissanite crystals from Cree. The transaction figures and explanation were reported in the context of Hunter’s accusations; they do not, by themselves, establish his broader claims of wrongdoing.
How the Hunters’ lawsuit ended
Cree’s SEC filing says a court entered final judgment on November 25, 2003, dismissing the lawsuit brought by Eric and Jocelyn Hunter against Cree and Neal Hunter under a settlement agreement. The filing states that the settlement required no payment to the plaintiffs. It also says Cree accepted Eric Hunter’s resignation as an employee effective November 24, 2003; his remaining stock options were terminated except for a prorated portion that vested. Cree’s SEC filing
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A dismissal under a settlement is not a ruling that the allegations were proven, nor does the cited filing establish that they were false. It records how the parties’ case concluded, not a merits decision on the accusations.
A later investor class action was a separate case
Eric Hunter’s allegations preceded securities class actions brought by Cree investors. A 2007 Fourth Circuit opinion describes Hunter as a Cree co-founder and CEO from 1987 to 1994, and affirms dismissal of the later investor class action. That case was distinct from the Hunters’ lawsuit, which had already ended under the 2003 settlement. Fourth Circuit opinion
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Were the allegations proven?
The cited material establishes that Hunter made the accusations, Cree rejected them, and the Hunters’ case was dismissed under a settlement. It does not establish a judicial finding on the truth of the allegations. The later class action’s dismissal was a separate outcome and should not be treated as a ruling on the Hunters’ claims.
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