Dot Hill Systems Corporation - Securities Class Action

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Stanford Law School

Dot Hill Systems Corporation Summary: The original complaint charges Dot Hill and certain of its officers and directors with violations of the Securities Exchange Act of 1934 by issuing a series of materially false statements. Specifically, defendants concealed the following: (i) the Company's accounting department suffered from material weaknesses and deficiencies and lacked the necessary staff and resources to perform its required functions; (ii) the Company's inadequate internal accounting process and controls enabled Dot Hill management to manipulate the Costs of Goods Sold and routinely and inappropriately misclassify "expenses"; (iii) the Company lacked effective internal controls in its financial reporting process; and (iv) the Company falsely reported its Q1-Q3 04 financial results by improperly recognizing revenue and by improperly recording expenses.

The complaint further alleges that on or around February 3, 2005, the Company announced its preliminary Q4 04 financial results and that it would be restating its 2004 unaudited financial results due to a data entry error that the Company attributed to material weaknesses in its internal controls. The Company also stated that it had "identified other errors pertaining to the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004 that it deems immaterial, including: the incorrect classification of certain product costs as operating expenses, the failure to eliminate corresponding revenue and cost of goods sold entries and the presence of duplicate entries."

The lawsuit was filed on behalf of all persons who purchased the common stock of Dot Hill Systems Corp between April 23, 2003 and February 3, 2005, inclusive. Also included are those who purchased in a secondary offering on or around September 17, 2003.

On June 8, 2006, several complaints were consolidated into a single action. On June 23, 2006, and the Court appointed as lead plaintiff a group comprised of the Detroit Police and Fire Retirement System and the General Retirement System of the City of Detroit. The consolidated complaint was filed on August 25, 2006, and the Company filed a motion to dismiss on October 5, 2006. The Court granted the Company’s motion to dismiss on March 15, 2007. Plaintiffs filed their Second Amended Consolidated Complaint on April 20, 2007. The Company filed a motion to dismiss the Second Amended Consolidated Complaint on May 1, 2008. On September 2, 2008, U.S. District Judge Janis L. Sammartino granted the defendants’ motion to dismiss without prejudice with leave to file a third amended consolidated class action complaint within thirty days of the date the Order. Judge Sammartino also granted the motion to stay discovery in the state court actions.

On October 10, 2008, the lead plaintiffs filed a Third Amended Consolidated Class Action Complaint against all defendants. The defendants responded by filing a motion to dismiss the Third Amended Consolidated Class Action Complaint on November 24, 2008. On March 18, 2009, Judge Sammartino granted the defendants’ motion to dismiss without prejudice with leave to file a Fourth Amended Consolidated Class Action Complaint.

On April 17, 2009, the lead plaintiffs filed a Notice of Appeal as to the order dismissing the action. According to an Order from the Ninth Circuit Court of Appeals issued on May 1, 2009, the U.S. Court of Appeals a review of the challenged order reflects that it may not be final and appealable because the USDC dismissed the third amended class action complaint with leave to amend. Within 21 days after the date of this order, appellant shall move for voluntary dismissal of this appeal or show cause why it should not be dismissed for lack of jurisdiction.

On May 15, 2009, the lead plaintiffs filed a notice of intent of not to file a Fourth Amended Consolidated Complaint, and on May 18, 2009, Judge Janis L. Sammartino issued the Final Judgment and Order of Dismissal dismissing the action with prejudice. On June 8, 2009, the plaintiffs filed an Amended Notice of Appeal as to the judgment and order granting the defendants’ motion to dismiss. On October 30, 2009, the Court entered the Order from the U.S. Court of Appeals. The parties stipulated to the dismissal of the appeal.

INDUSTRY CLASSIFICATION:
SIC Code: 3572
Sector: Technology
Industry: Computer Storage Devices

COMPANY/ISSUER NAME:	Dot Hill Systems Corporation
COMPANY/ISSUER TICKER:	HILL
COMPANY WEBSITE:	http://www.dothill.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Matt Brody, et al. v. Dot Hill Systems Corporation, et al.

COURT: S.D. California	DOCKET NUMBER: 06-CV-00228
JUDGE NAME: Hon. John S. Rhoades
DATE FILED: 01/31/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 04/23/2003	CLASS PERIOD END: 02/03/2005
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Federman & Sherwood (Oklahoma City) 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com Glancy Binkow & Goldberg LLP (Los Angeles) 1801 Ave. of the Stars, Suite 311, Los Angeles, CA, 90067 (voice) 310.201.915, (fax) 310. 201-916, info@glancylaw.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 655 West Broadway, Suite 1900, San Diego, CA, 92101 (voice) 619.231.1058, (fax) 619.231.7423, Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Stull, Stull & Brody (Los Angeles) 10940 Wilshire Boulevard - Suite 2300, Los Angeles, CA, 90024 (voice) 310.209.2468, (fax) , Weiss & Lurie (Los Angeles, CA) 10940 Wilshire Blvd - 24th Floor, Los Angeles, CA, 90024 (voice) 310.208.2800, (fax) 310.209.2348, info@wyca.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 9

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
Type: Complaint		Date on the document: 01/31/2006
Order Consolidating Related Actions
Type: Order of Consolidation		Date on the document: 06/08/2006
Order Appointing Lead Counsel
Type: Order Appointing LP/LC		Date on the document: 06/23/2006

REFERENCE COMPLAINT

In Re: Dot Hill Systems Corporation Securities Litigation

COURT: S.D. California	DOCKET NUMBER: 06-CV-00228
JUDGE NAME: Hon. Janis L. Sammartino
DATE FILED: 10/10/2008	SOURCE: Docket
CLASS PERIOD START: 04/23/2003	CLASS PERIOD END: 04/27/2006
TYPE OF COMPLAINT: Third Amended and Consolidated
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Kirby McInerney & Squire LLP 830 Third Avenue 10th Floor, New York Ave, NY, 10022 (voice) 212.317.2300, (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated and Amended Complaint For Violations Of Federal Securities Laws
Type: Complaint		Date on the document: 08/25/2006
Order Granting Motion To Dismiss
Type: Order		Date on the document: 03/15/2007
Second Amended Consolidated Complaint for Violations of Federal Securities Laws
Type: Complaint		Date on the document: 04/20/2007
Defendants' Motion To Dismiss Without Prejudice And (2) Granting Motion To Stay Discovery In State Court Actions
Type: Order		Date on the document: 09/02/2008
Third Amended Consolidated Class Action nComplaint For Violations Of Federal Securities Laws
Type: Complaint		Date on the document: 10/10/2008
Order: (1) Granting Defendants’ Motion To Dismiss And (2) Dismissing Without Prejudice
Type: Order		Date on the document: 03/18/2009
Notice Of Appeal
Type: Notice of Appeal		Date on the document: 04/17/2009
Plaintiffs' Notice Of Intent Not To File A Fourth Amended Consolidated Complaint And Request For Entry Of Judgment
Type: Notice		Date on the document: 05/15/2009
Final Judgment And Order Of Dismissal
Type: Order		Date on the document: 05/18/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 05/18/2009
Amended Notice of Appeal
Type: Notice of Appeal		Date on the document: 06/08/2009
Order
Type: Order		Date on the document: 10/30/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 10/30/2009

OTHER DOCUMENTS
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: Patricia Buckner, et al. v. Dot Hill Systems Corporation, et al.
Type: Complaint		Date on the document: 02/06/2006
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Inna Naryznai, et al. v. Dot Hill Systems Corporation, et al.
Type: Complaint		Date on the document: 02/09/2006
Order
Case Name and/or Number: In Re: Dot Hill Systems Corporation Securities Litigation
Type: Order		Date on the document: 05/01/2009

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