Vitesse Semiconductor (OTC:VTSS) shares fell over eight percent today after Chapman Capital disclosed an 8.3 percent stake in the company and disclosed an e-mail sent to the company inquiring as to the impact of a recent court ruling against the company's financial auditor for negligence as it could equate to future risks. The series of communications also showed a shocking disregard for shareholders by the chief financial officer of the company.

The series of communications, found in the company's recent Schedule 13D/A filing, outlined a simple request by Chapman Capital for the company to make a five minute phone call to inquire about the potential impact of these rulings. This is an important matter since the financial statements the firm is drafting are necessary for the next annual meeting. The CFO not only refused to call the company but also turned down the hiring, by Chapman, of a personal assistant to assist the chief financial officer in completing his obligations to shareholders!

This is only the latest in a series of problems facing the company. Chapman Capital has been fighting the company recently to hold its annual meeting so that it can nominate its own slate of directors to effect change. The activist hedge fund believes that the company is using its failure to provide audited financial statements to the SEC as an excuse to not hold a meeting. Essentially, they are holding shareholders hostage by failing to provide financial statements to those same owners!

Shareholders are hoping that Chapman Capital will be able to nominate its own members to the company's board of directors as it could mean significant changes. Vitesse has already dropped from a high of over $3/share in 2006 to its current levels just above $1/share. Clearly, change is needed. This makes VTSS a stock worth watching!

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