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Witness Systems, Inc. Summary: According to an article dated April 9, 2008, on March 31, 2008, Judge Clarence Cooper of the United States District Court for the Northern District of Georgia granted the defendants’ motion to dismiss, with prejudice.
As summarized by the Company’s FORM 10-Q for the quarterly period ended March 31, 2007, on January 25, 2007, the Court granted an unopposed motion by “Witness Systems Investor Group” for an order consolidating all later-filed securities class actions, appointing the Group as Lead Plaintiff, and approving its selection of Motley Rice LLC and Kahn Gauthier Swick LLC as Co-Lead Counsel. A Consolidated Amended Complaint was filed on April 6, 2007, adding a claim under Section 20(a) of the Exchange Act and naming the Company’s auditor, KPMG LLP, as an additional defendant.
The original complaint alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder by failing to disclose to the investing public that the defendants had engaged in the backdating of stock options grants to certain officers of the Company and by failing to account properly for expenses arising from the backdating. The complaint further alleges that defendants thus violated Generally Accepted Accounting Principles and filed false and misleading reports with the Securities and Exchange Commission. The complaint also contends that one or more of the defendants engaged in substantial and suspicious insider trading while in possession of material, non-public knowledge of the alleged backdating scheme.
The complaint further alleges that on or around July 27, 2006, defendant, the Company's Chief Financial Officer, disclosed that the Company was reviewing its stock options grants. On August 8, 2006, the Company announced that its Board of Directors had formed a special committee to investigate the stock option practices because the Company had identified some "discrepancies." The Company delayed the filing of its Form 10-Q for the period ending June 30, 2006, pending the outcome of the investigation. The Company admitted that it "believes it will need to record additional non-cash charges for stock-based compensation expense in prior periods . . . (which) will total approximately $10 million." As a result of the internal investigation, the Board stated that the Company's previously issued financial statements from February 2000 through June 30, 2006, should no longer be relied upon. Just three days later, on August 11, 2006, the Company disclosed that it intended to restate its prior financials and revealed that NASDAQ informed it on August 11 that the Company may be subject to delisting as a result of the matters disclosed thus far.
The price of Witness Systems common stock has fallen from its July 27, 2006, closing price of $18.19 per share to as low as $12.76 per share. The stock closed at $12.91 per share on August 11, 2006.
INDUSTRY CLASSIFICATION:
SIC Code: 7372
Sector: Technology
Industry: Software & Programming
| COMPANY/ISSUER NAME: | Witness Systems, Inc. |
| COMPANY/ISSUER TICKER: | WITS |
| COMPANY WEBSITE: | http://www.witsys.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Ruth Rosenberg, et al. v. Witness Systems, Inc., et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 08/14/2006 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 12/01/2006 | ||
| Order Granting Witness Systems Investor Group's Unopposed Motion To Consolidate Cases For All Purposes And To Appoint Lead Plaintiff And Lead Counsel | |||
| Type: Order | Date on the document: 1/25/2007 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: Witness Systems, Inc. Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Consolidated Amended Complaint For Violations Of Federal Securities Laws | |||
| Type: Complaint | Date on the document: 4/6/2007 | ||
| Judgment | |||
| Type: Other | Date on the document: 3/31/2008 | ||
| Order | |||
| Type: Order | Date on the document: 3/31/2008 | ||
| Order | |||
| Type: Order | Date on the document: 3/31/2008 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 3/31/2008 | ||
| OTHER DOCUMENTS | |||
| Verified Shareholder Derivative Complaint For Violation Of The Federal Securities Laws And State Law Claims For Breach Of Fiduciary Duty, Abuse Of Control, Constructive Fraud, Corporate Waste, Unjust Enrichment, Gross Mismanagement And Action For Accounting | |||
| Case Name and/or Number: Miller, et al. v. Witness Systems, Inc., et al. | |||
| Type: Complaint | Date on the document: 08/29/2006 | ||
| U.S. District Court Civil Docket | |||
| Case Name and/or Number: Miller, et al. v. Gould, et al. | |||
| Type: Docket | Date on the document: 10/06/2006 | ||
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