Openwave Systems Inc. Summary: The complaint charges Openwave and certain of its officers with violations of Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder by the United States Securities and Exchange Commission (the "SEC"), and Section 20(a) of the Exchange Act.
Specifically, the complaint alleges that in 2000 and 2001, the senior executives of Openwave caused the Company to grant to its executives and certain other employees of the Company stock options that improperly had exercise prices below the market price of Openwave stock on the actual date of grant. The Company and the Individual Defendants (defined below) failed to disclose this fact, and instead issued numerous false and misleading public statements misrepresenting the Company's financial statements, including its accumulated deficit, in violation of generally accepted accounting principles ("GAAP"). When these improper grants and the improper accounting concealing them were finally revealed to the public, the price of Openwave stock declined dramatically, causing substantial damages to investors.
The complaint further alleges that on or around December 1, 2006, the Company issued a press release and filed its Form 10-K for the fiscal year ended June 30, 2006 (the "2006 10-K") disclosing, for the first time, that its previously reported financial results were inaccurate and were being restated. Specifically, the Company increased its accumulated deficit by $182 million to correct for option expenses that were improperly under-reported between 2001 and 2005.
On May 30, 2007, the Court entered the Case Management Order signed by U.S. District Judge Denise L. Cote. Several actions are consolidated under In re Openwave Systems Securities Litigation, Master File 07cv1309. The Arkansas Teacher Retirement System is appointed lead plaintiff; Bernstein Litowitz Berger & Grossmann LLP shall serve as lead counsel for all plaintiffs in the consolidated actions and the class. On August 3, 2007, the plaintiff filed a Correct Consolidated and Amended Class Action Complaint.
On August 10, 2007, a motion to dismiss the consolidated amended complaint was filed by J.P. Morgan Securities, Inc., Lehman Brothers, Merrill Lynch Pierce Fenner & Smith, Inc., and Thomas Weisel Partners LLC. At the same time, a motion to dismiss was filed by KPMG LLP and was followed by several different motions to dismiss. In addition, a stipulation and Order was entered on August 31, 2007 by setting the page limits to the defendant’s motion to dismiss. The court finally granted the defendant’s motion to dismiss and entered its Order on October 31, 2007. However, a stipulation and Order was entered on November 19, 2007 in regards to the extension of time to answer the complaint. On December 19, 2007, a pretrial scheduling order was entered and the times and dates have been set. Furthermore, another pretrial Order was entered on May 14, 2008. Lastly, on June 3, 2008, an endorsed stipulated protective Order was entered in regards to the procedures of the handling of confidential material.
According to a press release dated September 17, 2008, Openwave Systems reached an agreement in principle to settle the securities class action lawsuit filed against the company, according to the company's Sept. 15 10-K filing with the U.S. Securities and Exchange Commission. Initially, between Feb. 21 and March 27, 2007, four substantially similar securities class action complaints were filed in the U.S. District Court for the Southern District of New York against Openwave and four current and former officers of the company.
On November 5, 2008, an Order Preliminarily Approving Settlement and Setting Settlement Hearing was filed by the parties in order to settle all claims against the defendants. On February 27, 2009, Judge Denise L. Cote approved the $20 million settlement and dismissed the action with prejudice. Judge Cote also awarded fees in the amount of 23% of the $20 million Settlement Amount and reimbursement of litigation expenses in the amount of $327,889.73.
On June 09, 2010, An Order Approving Distribution Plan was issued by the Court in accordance with the earlier settlement.
SIC Code: 7372
Industry: Software & Programming
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