UNITED STATES DISTRICT COURT
Plaintiff, individually and on behalf of all other persons similarly situated, by his undersigned attorneys, alleges as follows upon personal knowledge as to himself and his own acts and upon information and belief as to all other matters, based upon an investigation conducted by and through his attorneys, which included, among other things, a review of the press releases and other public statements by Quintus Corporation ("Quintus" or the "Company"), as well as the Company's public filings with the Securities and Exchange Commission (the "SEC"). // // NATURE OF THE ACTION 1. This is a class action on behalf of all persons who purchased common stock of Quintus pursuant or traceable to the Company's initial public offering of 4.5 million common shares of Quintus at $18.00 per share for a total of $81 million (the "IPO") or on the open market during the period from November 15, 1999 through and including November 15, 2000 (the "Class Period"), to recover damages caused by the defendants' violation of the federal securities laws. During the Class Period, the defendants made false and misleading statements to the investing public about the Company's business and financial results. 2. These materially false and misleading statements allowed the Company to engage in a number of acquisitions in which it acquired the target companies for Quintus stock. Such acquisitions would have been impossible but for the Company's artificial inflation of its stock price. 3. On November 15, 2000 the Company issued a press release announcing that it would be delaying filing of its 10-Q with the Securities and Exchange Commission for the quarter ended September 30, 2000. In that press release, the Company disclosed for the first time that its Form 10-Q would be delayed pending: completion of the investigation of revenue and accounts receivable for that period, previously announced on October 17, 2000, as well as for earlier periods. Among the issues under review is Quintus's statement, on October 17, 2000, that it had collected a receivable from an outsourcing company. Subsequent to that announcement, it has become unclear whether funds received by Quintus, apparently in satisfaction of that receivable, were in fact paid by or on behalf of the outsourcing company . . . Quintus' Board of Directors has placed Chairman and Chief Executive Officer Alan Anderson on administrative leave. 4. In the wake of this announcement, the price of Quintus' stock fell over 50%, from a closing price of $6 on November 14, 2000 to just $2 31/32 on November 15, 2000, on heavy volume whereupon NASDAQ halted trading at 12:38 p.m., Eastern Time, pending additional information from the Company.5. From the above statement it can be inferred that throughout the Class Period, Quintus' financial statements were materially false and misleading in that they overstated revenue and net income. Based upon Quintus' materially false and misleading financial results, the Company's common stock price traded as high as $57.50 per share during the Class period. JURISDICTION AND VENUE 6. The claims alleged herein arise under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (the "Securities Act"), 15 U.S.C. §§77k, 77l(a)(2), and 77(o) and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §§78j(b) and 78t(a), and Rule 10b-5, 17 C.F.R. §240.10b-5 promulgated thereunder. 7. This Court has jurisdiction over the subject matter of this action pursuant to Section 27 of the Securities Exchange Act of 1934 (the "Exchange Act"), 15 U.S.C. §78aa, Section 22 of the Securities Act, 15 U.S.C. §77v, and 28 U.S.C. §§1331 and 1337. 8. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act and 28 U.S.C. §1391(b). Many of the acts and transactions constituting the violations of law alleged herein, including the preparation and dissemination to the investing public of false and misleading information, occurred in substantial part in this District. Moreover, the Company's corporate headquarters are located in this District. 9. In connection with the acts, transactions and conduct alleged herein, defendants, directly and indirectly, used the means and instrumentalities of interstate commerce, including the United States mails, interstate telephone communications and the facilities of the national securities exchanges. THE PARTIES 10. Plaintiff Luiz Alves purchases shares of Quintus common stock as set forth in the attached Certification. 11. Defendant Quintus maintains its corporate headquarters in Fremont, California. As of October 2000, Quintus had roughly 40 million shares outstanding. During the Class Period, Quintus stock actively traded on the NASDAQ National Market System under the ticker symbol QNTS. Quintus states that it: provides a comprehensive electronic customer relationship management solution that enables companies to increase revenue potential by improving customer satisfaction and loyalty. A technology innovator, Quintus offers products that manage all customer interactions, such as customer orders, inquiries and service requests, and allow delivery of consistent customer service across multiple communications channels, including the Internet, e-mail and telephone. 12. Defendant Alan Anderson is and was Quintus' Chairman and Chief Executive Officer ("CEO") at all relevant times. Anderson signed the Company's Form 10-K for the year ended March 31, 2000 (the "Fiscal 2000 10-K") and the Registration Statement. On November 15, 2000, the Company placed Anderson on administrative leave.13. Defendant Paul Bartlett ("Bartlett") is and was at all relevant times Quintus' Chief Operating Officer and a director of Quintus. Bartlett signed the Fiscal 2000 10-K and the Registration Statement. On November 15, 2000, the Company named Bartlett acting Chief Executive Officer in place of Anderson. 14. Defendant Susan Salvesen ("Salvesen") is and was at all relevant times Chief Financial Officer of the Company. Salvesen signed Quintus' Form 10-Q for the quarterly period ended December 31, 1999, the Fiscal 2000 10-K, the Company's Form 10-Q for the quarterly period ended June 30, 2000 and the Registration Statement. 15. Defendants Anderson, Bartlett, and Salvesen ("Individual Defendants"), by reason of their positions with the Company, are controlling persons of the Company within the meaning of §15 of the Securities Act and §20 of the Securities Exchange Act, and had access to internal Company documents, reports and other information and, as a result of the foregoing, were responsible for the truthfulness and accuracy of the Company's public reports and releases described herein. Individual Defendants were able to, and did, directly or indirectly, in whole or in material part, control the contents of public statements issued by or on behalf of the Company. They participated in and approved the issuance of such statements made throughout the Class Period, including the materially false and misleading statements identified herein. 16. Quintus had a duty to promptly disseminate truthful and accurate information with respect to its business and financial condition, and to promptly correct any public statements issued by or on behalf of the Company that had become false or misleading. As an officer of a publicly-held company, Anderson had the same obligation. // 17. Each of the defendants knew or recklessly disregarded that the misleading statements and omissions complained of herein would adversely affect the integrity of the market for the Company's stock and would cause the price of the Company's common stock to become artificially inflated. Each of the defendants acted knowingly or in such a reckless manner as to constitute a fraud and deceit upon plaintiff and other members of the Class. 18. Defendants are liable, jointly and severally, as direct participants in the wrongs complained of herein. CLASS ACTION ALLEGATIONS 19. Plaintiff brings this action as a class action pursuant to Federal Rules of Civil Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons who purchased Quintus common stock during the period from November 15, 1999 through November 15, 2000 inclusive (the "Class Period"), and who suffered damages thereby. Excluded from the Class are the defendants, any entity in which the defendants have a controlling interest or is a parent or subsidiary of or is controlled by the Company, and the officers, directors, employees, affiliates, legal representatives, heirs, predecessors, successors and assigns of the defendants (the "Class"). 20. The members of the Class are so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to the plaintiff at this time and can only be ascertained through appropriate discovery, the plaintiff believes there are, at a minimum, thousands of members of the Class who traded during the Class Period. 21. Common questions of law and fact exist as to all members of the Class and predominate over any questions affecting solely individual members of the Class. Among the questions of law and fact common to the Class are: a. whether the federal securities laws were violated by defendants' acts as alleged herein; b. whether the Company issued false and misleading financial statements during the Class Period; c. whether defendants acted knowingly or recklessly in issuing false and misleading financial statements; d. whether the market prices of the Company's securities during the Class Period were artificially inflated because of the defendants' conduct complained of herein; and e. whether the members of the Class have sustained damages, and, if so, what is the proper measure of damages. 22. Plaintiff's claims are typical of the claims of the members of the Class as plaintiff and members of the Class sustained damages arising out of the defendants' wrongful conduct in violation of federal law as complained of herein. 23. Plaintiff will fairly and adequately protect the interests of the members of the Class and has retained counsel competent and experienced in class actions and securities litigation. Plaintiff has no interests antagonistic to or in conflict with those of the Class. 24. A class action is superior to other available methods for the fair and efficient adjudication of the controversy since joinder of all members of the Class is impracticable. Furthermore, because the damages suffered by the individual Class members may be relatively small, the expense and burden of individual litigation make it impossible for the Class members individually to redress the wrongs done to them. There will be no difficulty in the management of this action as a class action. 25. Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-on-the-market doctrine in that: a. defendants made public misrepresentations or failed to disclose material facts during the Class Period; b. the omissions and misrepresentations were material; c. the securities of the Company traded in an efficient market; d. the misrepresentations and omissions alleged would tend to induce a reasonable investor to misjudge the value of the Company's securities; and e. plaintiff and members of the Class purchased their Quintus stock between the time the defendants failed to disclose or misrepresented material facts and the time the true facts were disclosed, without knowledge of the omitted or misrepresented facts. // 26. Based upon the following, plaintiff and members of the Class are entitled to the presumption of reliance upon the integrity of the market. NO STATUTORY SAFE HARBOR 27. The statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the false statements pleaded in this complaint, because none of the statements pleaded herein are "forward-looking" statements nor were they identified as "forward-looking statements" when made. Nor did meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the statement accompany those statements. To the extent that the statutory safe harbor does apply to any statements pleaded herein which are deemed to be forward-looking, the defendants are liable for those false forward-looking statements, because at the time each of those statements were made, the speaker actually knew the forward-looking statement was false and/or the statement was authorized and/or approved by an executive officer of the Company, who actually knew that those statements were false when made. FALSE AND MISLEADING STATEMENTS
DURING THE CLASS PERIOD 28. On or about November 15, 1999, Quintus offered to the investing public, pursuant to a registration statement dated November 15, 1999, 4.5 million shares at $18.00 per share. In its press release Quintus stated that it was offering: 4.5 million shares of common stock at an offering price of $18.00 per share. All of the shares were offered by the company. The common stock will be traded on the NASDAQ National Market under the symbol "QNTS." Quintus' initial public offering was led by Donaldson, Lufkin and Jenrette,
with Dain Rauscher Wessels, SG Cowen Securities and DLJdirect. Quintus Corporation provides a comprehensive electronic customer relationship
management (eCRM) solution to manage customer interactions, such as customer
order, inquiries and service requests, and deliver consistent customer
service across multiple communication channels, including the Internet,
email and the telephone. The Quintus eContact (TM) software suite includes
applications that address the needs of customer service representatives
and agents in sales and service, consumer relations, technical support,
and human resources centers and a routing engine to manage customer interactions.
Quintus eContact enables companies to handle high volumes of customer
interactions and leverage opportunities to sell additional products and
services to their customers. 29. As the result of this public offering, Quintus reaped, after underwriter fees, over $75 million for the Company. 30. In the Prospectus, the defendants reported revenues of over $22 million and gross profit of over $16 million for the six months ended September 30, 1999. 31. As reported in Business Wire, on or about September 13, 1999, Quintus announced that it had entered into an agreement to acquire Acuity Corporation ("Acuity"), a provider of software products to manage Internet-based customer interactions. The acquisition was structured as a merger in which Acuity would become a wholly owned subsidiary of Quintus and Acuity's stockholders would become stockholders of Quintus. The purchase price was approximately $45.5 million. Quintus completed its acquisition of Acuity on or about November 11, 1999. 32. Further, as reported in the Business Wire, on February 28, 2000, Quintus announced its agreement to acquire Mustang.com, Inc. ("Mustang"), a provider of e-mail management, in a stock merger valued at approximately $290 million. Under the terms of the agreement, Quintus was to exchange .793 shares of Quintus common stock for each outstanding share of Mustang. 33. These acquisitions would have been impossible without the Company and the Individual Defendants artificially inflating the Company's stock price. 34. On January 19, 2000, Quintus announced record revenues for the third quarter of fiscal year 2000, ending December 31, 1999. The announcement stated in relevant part that: Revenues for the quarter were $13.5 million, a 127% increase over revenues of $6.0 million in the third quarter of fiscal year 1999. On a pro forma basis, excluding the impact of acquisition-related charges and the amortization of deferred stock compensation and adjusting for the inclusion of preferred shares prior to their conversion to common stock, net loss for the quarter was $3.2 million or $(.12) per share, compared to $5.1 million or $(.26) per share, for the same period in fiscal 1999. and that: "We are very pleased with the results of this quarter. We recorded revenues, managed our costs, completed the acquisition of Acuity, and continued to see validation of the industry embracing Quintus eContact," said Alan Anderson, Chairman and CEO of Quintus Corporation. "We continue to see demand for our eContact suite from both brick and mortar companies and dot.com businesses. In addition, Ziptone, a leading provider of live, outsourced customer support services for e-commerce Web sites, and Ticketmaster, the worldwide leader in event ticketing, selected Quintus eContact as their platform of choice." 35. These results were substantially repeated in the Company's Form 10-Q for the quarterly period ended December 31, 1999, signed by defendant Salvesen and filed with the SEC on or about February 14, 2000.36. As reported in the Business Wire on or about April 19, 2000, Quintus announced its financial results for its fiscal year ended March 31, 2000. The Company reported revenues for the quarter of $16.1 million, a 90% increase over revenues of $8.5 million in the fourth quarter of fiscal year 1999. For fiscal year 2000, revenues were $51.7 million compared to $30.3 million for the same period last year, an increase of 71%. Excluding the impact of acquisition-related charges and the amortization of deferred stock compensation and adjusting for the inclusion of preferred shares prior to their conversion to common stock, net loss from continuing operations for the year was $4.6 million or $(.18) per share, compared to $7.2 million or $(.38) per share, for the same period in fiscal 1999. 37. These results were substantially repeated in the fiscal 2000 10-K that was signed by the Individual Defendants and filed with the SEC on or about April 2000. 38. As reported in the Business Wire on or about July 20, 2000, Quintus announced its financial results for the quarterly period ended June 30, 2000. The Company reported record revenues for the quarter of $18.5 million, an 80% increase over revenues of $10.3 million in the first quarter of fiscal year 2000. 39. These results were substantially repeated in the Company's Form 10-Q for the quarterly period ended June 30, 2000 that was signed by defendant Salvesen and filed with the SEC on or about August 14, 2000. 40. As reported in the Business Wire on or about October 17, 2000, Quintus announced its financial result for the quarterly period ended September 30, 2000. The Company reported revenues for the quarter of $21.4 million, an 81% increase over revenues of $11.8 million in the second quarter of fiscal year 2000. For the six months of fiscal 2001, revenues increased 81% to $39.9 million compared to $22.1 million for the same period in fiscal 2000. 41. In the same October 17, 2000 press release, the Company touted as one of the "key highlights" for the quarter the collection of "the outstanding receivable from a large outsourcing company" that "thereby reduced Days Sales Outstanding (DSO) to 104 days." 42. The market for the Company's common stock was open, well-developed and efficient at all relevant times. As a result of these materially false and misleading statements and failure to disclose, the Company's stock traded at artificially inflated prices during the Class Period. As a result, plaintiff and the other members of the class have suffered damages as a result of defendants' fraudulent conduct alleged herein. THE TRUTH EMERGES 43. On November 15, 2000, Quintus shocked the investment community when it announced that it would delay filing its Form 10-Q for the quarter ended September 30, 2000 pending completion of an "investigation of revenue and accounts receivable for that period." 44. The Company further stated that "[a]mong the issues under review is Quintus' statement on October 17, 2000, that it had collected a receivable from an outsourcing company. Subsequent to that announcement, it has become unclear whether funds received by Quintus, apparently in satisfaction of that receivable, were in fact paid by or on behalf of the outsourcing company." 45. The Company also announced that it had placed Chief Executive Officer and Chairman of the Board of Directors Alan Anderson on administrative leave and had hired PricewaterhouseCoopers LLP to investigate these financial reporting matters. 46. Following this announcement by the Company, the price of Quintus stock fell by 50% before NASDAQ halted trading in Quintus stock, requesting more information. 47. As a result, in the Prospectus and throughout the Class Period, Quintus' financial statements were materially false and misleading in that they overstated revenue and net income. 48. Each statement identified above was materially false and misleading when made. Throughout the Class Period, Quintus reported artificially inflated revenue and net income in violation of Generally Accepted Accounting Principles ("GAAP"). // 49. Quintus' practices violated GAAP. The realization principle of GAAP requires that revenue be earned before it is recognized. Under GAAP, revenue is recognized when the earnings process is completed and an exchange has taken place (Statement of Financial Accounting Concepts No. 5, Recognition and Measurement in Financial Statements of Business Enterprises ¶¶ 83, 84). The earnings process is not complete until collection of the sales price is reasonably assured. Id. COUNT I Against All Defendants For Violations of §11 of the Securities Act of 1933 50. Plaintiff repeats and realleges each and every allegation contained above, except to the extent that any allegations contained above may be interpreted to sound in fraud in which case such allegations are not incorporated in the present claim. 51. This Claim is brought pursuant to §11 of the Securities Act, 15 U.S.C. §77k, on behalf of the Class, against all defendants. 52. The Registration Statement, when it became effective, was inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and concealed and failed adequately to disclose material facts as described above. 53. Plaintiff and the other members of the Class purchased Quintus' common stock pursuant to and traceable to the Registration Statement. 54. Quintus is the registrant for the shares sold to plaintiff and other members of the Class. The defendants named herein were responsible for the contents and dissemination of the Registration Statement and the Prospectus. 55. As issuer of the shares, Quintus is strictly liable to plaintiff and the Class members for the misstatements and omissions. 56. None of the defendants named herein made a reasonable investigation or possessed reasonable grounds for the belief that the statements contained in the Registration Statement and the Prospectus were true and without omissions of any material facts and were not misleading. 57. Defendants issued, caused to be issued and participated in the issuance of materially false and misleading written statements to the investing public which were contained in the Prospectus, which misrepresented or failed to disclose, inter alia, the facts set forth above. By reasons of the conduct herein alleged, each defendant violated, and/or controlled a person who violated §11 of the Securities Act. 58. Plaintiff and the Class members have sustained damages. The value of Quintus shares has declined substantially subsequent to and due to defendants' violations. 59. At the times they purchased Quintus shares, plaintiff and other members of the Class were without knowledge of the facts concerning the wrongful conduct alleged herein and could not have reasonably discovered those facts prior to the IPO. Less than one year elapsed from the time that plaintiff discovered or reasonably could have discovered the facts upon which this Complaint is based to the time that plaintiff filed his Complaint. Less than three years elapsed from the time that the securities upon which this Claim is brought were bona fide offered to the public to the time plaintiff filed his Complaint. COUNT II Against All Defendants For Violations of §12(a)(2) of the Securities Act of 1933 60. Plaintiff repeats and realleges each and every allegation contained above, except to the extent that any allegations contained above may be interpreted to sound in fraud in which case such allegations are not incorporated in the present claim. 61. This Claim is brought by plaintiff pursuant to §12(a)(2) of the Securities Act on behalf of the Class against Quintus and the Individual Defendants. 62. Quintus and the Individual Defendants were sellers, offerors, and/or solicitors of sales of the shares offered pursuant to the Prospectus. 63. The Prospectus contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading, and concealed and failed to disclose material facts. Quintus and the Individual Defendants' actions of solicitation included participating in the preparation of the false and misleading Prospectus. // 64. Quintus and the Individual Defendants owed to the purchasers of Quintus shares, including plaintiff and other Class members, the duty to make a reasonable and diligent investigation of the statements contained in the offering materials, including the Prospectus contained therein, to ensure that such statements were true and that there was no omission to state a material fact required to be stated in order to make the statements contained therein not misleading. Quintus knew of, or in the exercise of reasonable care should have known of, the misstatements and omissions contained in the Prospectus as set forth above. 65. Plaintiff and other members of the Class purchased Quintus shares pursuant to and traceable to the defective Prospectus. Plaintiff did not know, or in the exercise of reasonable diligence could not have known, of the untruths and omissions contained in the Prospectus. 66. Plaintiff, individually and representatively, hereby offers to tender to defendants those securities which plaintiff and other Class members continue to own, on behalf of all members of the Class who continue to own such securities, in return for the consideration paid for those securities together with interest thereon. 67. By reason of the conduct alleged herein, Quintus and the Individual Defendants violated, and/or controlled a person who violated §12(a)(2) of the Securities Act. Accordingly, plaintiff and members of the Class who hold Quintus shares purchased pursuant to the Prospectus have the right to rescind and recover the consideration paid for their Quintus shares and, hereby elect to rescind and tender their Quintus shares to Quintus and the Individual Defendants. Plaintiff and Class members who have sold their Quintus shares are entitled to rescissory damages. 68. Less than three years elapsed from the time that the securities upon which this Claim is brought were sold to the public to the time of filing of this action. Less than one year elapsed from the time when plaintiff discovered or reasonably could have discovered the facts upon which this Claim is based to the time of the filing of this action. // COUNT III
Of §15 Of The Securities Act Of 1933 69. Plaintiff repeats and realleges each and every allegation contained above, except to the extent that any allegation contained above may be interpreted to sound in fraud, in which case such allegations are not incorporated in the present claim. 70. The Individual Defendants, by reason of their duty to Quintus and the investing public, and their control of Quintus and its statements, and by reason of their acts as described herein, controlled Quintus within the meaning of §15 of the Securities Act. 71. The Individual Defendants thus violated §15 of the Securities Act and are liable for the acts of Quintus which caused damage to the plaintiff and the Class. COUNT
IV Violation Of Section 10(b) Of The Exchange Act And Rule 10b-5 Of The Securities And Exchange Commission 72. Plaintiff repeats and realleges each and every allegation contained in the foregoing paragraphs as if fully set forth herein. 73. This Count is asserted against all defendants and is based upon violations of Section 10(b) of the 1934 Act, 15 U.S.C. §78j(b), and Rule 10b-5 promulgated thereunder. 74. During the Class Period, defendants directly engaged in a common plan, scheme, and unlawful course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices, and courses of business which operated as a fraud and deceit upon plaintiff and the other members of the Class, and made various deceptive and untrue statements of material facts and omitted to state material facts in order to make the statements made, in light of the circumstances under which they were made, not misleading to plaintiff and the other members of the Class. The purpose and effect of the scheme, plan, and unlawful course of conduct was, among other things, to induce plaintiff and the other members of the Class to purchase Quintus common stock during the Class Period at artificially inflated prices. // 75. During the Class Period, the defendants, pursuant to said scheme, plan, and unlawful course of conduct, knowingly and recklessly issued, caused to be issued, participated in the issuance of deceptive and materially false and misleading statements to the investing public as particularized above. 76. As a result of the dissemination of the false and misleading statements set forth above, the market price of Quintus common stock was artificially inflated during the Class Period. In ignorance of the false and misleading nature of the statements described above and the deceptive and manipulative devices and contrivances employed by the defendants, plaintiff and the other members of the Class relied, to their detriment, on the integrity of the market price of the stock in purchasing Quintus common stock. Had plaintiff and the other members of the Class known the truth, they would not have purchased Quintus shares or would not have purchased them at the inflated prices that were paid. 77. Plaintiff and the other members of the Class have suffered substantial damages as a result of the wrongs herein alleged in an amount to be proved at trial. 78. By reason of the foregoing, defendants directly violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in that they: (a) employed devices, schemes, and artifices to defraud; (b) made untrue statements of material facts or omitted to state material facts in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon plaintiff and the other members of the Class in connection with their purchases of Quintus common stock during the Class Period.
Violation Of Section 20(a) The Exchange Act 79. Plaintiff repeats and realleges each and every allegation contained in each of the foregoing paragraphs as if set forth fully herein. 80. Individual Defendants acted as controlling persons of the Company within the meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of the high-level positions, and active participation in and/or awareness of the Company's day-to-day operations, Individual Defendants had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company, including the content and dissemination of the various statements that plaintiff contends are false and misleading. Individual Defendants were provided with, or had unlimited access to copies of the Company's reports, press releases, public filings and other statements alleged by plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected. 81. In particular, Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company and, therefore, are presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same. 82. By virtue of their positions as controlling persons, Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of the wrongful conduct, plaintiff and other members of the class suffered damages in connection with their purchases of the Company's securities during the Class Period. WHEREFORE, plaintiff, on his behalf and on behalf of the Class, prays for judgment as follows: A. Declaring this action to be a proper class action and certifying plaintiff as a class representative under Rule 23 of the Federal Rules of Civil Procedure; B. Awarding compensatory damages in favor of plaintiff and the other members of the Class against the defendants for the damages sustained as a result of the wrongdoings of the defendants, together with interest thereon; C. Awarding plaintiff the fees and expenses incurred in this action, including reasonable allowance of fees for plaintiff's attorneys and experts; D. Granting extraordinary equitable and/or injunctive relief as permitted by law, equity and federal statutory provisions sued on hereunder; and E. Granting such other and further relief as the court may deem just and proper. // JURY DEMAND Plaintiff demands a trial by jury.
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