Sonic Solutions, Inc. - Securities Class Action

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Stanford Law School

Sonic Solutions, Inc. Summary: The original complaint charges Sonic and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Sonic develops and markets computer software related to digital media, such as data, photographs, audio and video in digital formats.

The complaint alleges that prior to the Class Period, Sonic had manipulated its stock option accounting which caused its SEC filings made during the Class Period to be false. Also during the Class Period, Sonic and its top officers made false and misleading statements about its business and prospects, all while concealing its false stock option grant practices, causing its stock to trade at artificially inflated levels.

On February 1, 2007, Sonic announced that it had commenced a voluntary review of its historical and current stock option grant practices and related accounting. Then, on May 17, 2007, after the market closed, Sonic announced its preliminary unaudited financial results for the fourth quarter ended March 31, 2007, and stated that based on its previous review, Sonic lacked sufficient documentation for certain historical option grants and that the measurement dates associated with these option grants will need to be adjusted. The Company further stated that it will have to record additional cash and non-cash charges for stock-based compensation expense and restate previous financial statements, and that such charges will be material.

On this news, Sonic's stock collapsed from $13.37 per share to as low as $11.76 per share on volume of 1.8 million shares. This drop continued a decline from $18 per share which began in February 2007, when Sonic first disclosed its stock option problems.

On January 10, 2008, the Court issued the Order by Martin J. Jenkins granting the motion to appoint City Of Westland Police and Fire Retirement System and Plymouth County Retirement System as lead plaintiffs and approved their selection of Coughlin Stoia Geller Rudman & Robbins LLP and Labaton Sucharow LLP as lead counsels. On March 21, 2008, a Consolidated Class Action Complaint was filed. On May 27, 2008, the plaintiffs filed a Corrected Consolidated Class Action Complaint. The defendants have filed a motion to dismiss the Corrected Consolidated Class Action Complaint, which is currently pending before the Court.

As summarized by the Company’s FORM 10-Q For the Quarterly Period Ended September 30, 2009, on April 6, 2009, the judge issued an order granting in part and denying in part the Company’s motion to dismiss, with leave to amend. On May 8, 2009, plaintiffs filed a first amended class action complaint, alleging violations of §§ 10(b), 14(a), 20(a), and 20A of the Securities Exchange Act. In July 2009, the parties reached an agreement in principle to settle this action. On October 15, 2009, the parties executed a stipulation of settlement providing for the creation of a settlement fund of $5 million to satisfy claims submitted by class members and to pay any attorneys fees awarded by the Court. As part of the settlement, the Company’s Directors and Officers liability insurers agreed to fund the settlement amount. Also on October 15, 2009, class counsel submitted a motion for preliminary approval of the settlement which is set to be heard on December 3, 2009. In the event that the court preliminarily approves the settlement, notice will be provided to all class members and a date will be set for a final approval hearing.

On December 2, 2009, Judge Claudia Wilken preliminarily approved the settlement. The Fairness Hearing set for April 8, 2010. The motions for settlement, the plan of allocation and attorney fees and expenses were approved on April 8, 2010. The case is now dismissed with prejudice.

INDUSTRY CLASSIFICATION:
SIC Code: 7373
Sector: Technology
Industry: Computer Networks

COMPANY/ISSUER NAME:	Sonic Solutions, Inc.
COMPANY/ISSUER TICKER:	SNIC
COMPANY WEBSITE:	www.sonic.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

City of Westland Police and Fire Retirement System, et al. v. Sonic Solutions, et al.

COURT: N.D. California	DOCKET NUMBER: 07-CV-05111
JUDGE NAME: Hon. Martin J. Jenkins
DATE FILED: 10/04/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 10/04/2002	CLASS PERIOD END: 05/17/2007
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Coughlin Stoia Geller Rudman & Robbins LLP (Los Angeles) 355 S. Grand Avenue, Suite 4170, Los Angeles, CA, 90071 (voice) 213.617.9007, (fax) 213.617.9185, info@csgrr.com/ _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Complaint For Violation Of The Federal Securities Laws
Type: Complaint		Date on the document: 10/04/2007
Order Granting The Retirement Funds' Motion For Appointment As Lead Plaintiff And Approving Their Selection Of Lead Counsel
Type: Order		Date on the document: 01/10/2008

REFERENCE COMPLAINT

City Of Westland Police And Fire Retirement System And Plymouth County Retirement System, et al. v. Sonic Solutions, Inc., et al.

COURT: N.D. California	DOCKET NUMBER: 07-CV-05111
JUDGE NAME: Hon. Claudia Wilken
DATE FILED: 05/08/2009	SOURCE: Docket
CLASS PERIOD START: 10/23/2002	CLASS PERIOD END: 05/17/2007
TYPE OF COMPLAINT: First Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Coughlin Stoia Geller Rudman & Robbins LLP (San Francisco) 100 Pine Street, Suite 2600, San Francisco, CA, 94111 (voice) 415.288.4545, (fax) 415.288.4534, Labaton Sucharow LLP 140 Broadway, New York, NY, 10005 (voice) 212.907.0700, (fax) 212.818.0477, info@labaton.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint For Violations Of The Federal Securities Law
Type: Complaint		Date on the document: 03/21/2008
[Corrected] Consolidated Class Action Complaint For Violations Of The Federal Securities Law
Type: Complaint		Date on the document: 05/27/2008
Order Granting In Part And Denying In Part Defendants’ Motion To Dismiss
Type: Order		Date on the document: 04/06/2009
First Amended Class Action Complaint For Violations Of The Federal Securities Law
Type: Complaint		Date on the document: 05/08/2009
Class Action - Further Case Management Conference Statement And Order
Type: Order		Date on the document: 09/28/2009
Stipulation of Settlement
Type: Settlement		Date on the document: 10/12/2009
Lead Plaintiffs’ Notice Of Motion And Unopposed Motion For Preliminary Approval Of Proposed Class Settlement And Memorandum Of Points And Authorities In Support Thereof
Type: Motion		Date on the document: 10/15/2009
[Proposed] Order Preliminarily Approving Settlement And Providing For Notice
Type: Order		Date on the document: 10/15/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 10/15/2009
Stipulation And [Proposed] Order Rescheduling Final Approval Hearing
Type: Order		Date on the document: 12/02/2009
Declaration Of Joy Ann bull Filed On Behalf Of Coughlin Stoia Geller Rudman & Robbins LLP In Support Of Application For Award Of Attorneys' Fees And Expenses
Type: Declaration		Date on the document: 01/21/2010
Declaration Of Joy Ann Bull In Support Of Lead Counsel's Motion For An Award of Attorneys' Fees And Expenses
Type: Declaration		Date on the document: 01/21/2010
Joint Declaration Of Shawn A. Williams And Jonathan Gardner In Support Of Final Approval of Class Action Settlement, Plan of Allocation of Settlement Proceeds, And Award of Attorneys' Fees And Expenses
Type: Declaration		Date on the document: 01/21/2010
Lead Counsel's Notice Of Motion And Motion For An Award Of Attorneys' Fees And Expenses And Memorandum Of Points And Authorities In Support Thereof
Type: Notice		Date on the document: 01/21/2010
Notice Of Motion And Motion For Final Approval of Class Action Settlement And The Plan of Allocation Of Settlement Proceeds And Memorandum Of Points And Authorities In Support Thereof
Type: Notice		Date on the document: 01/21/2010
Final Judgment And Order Of Dismissal With Prejudice
Type: Order		Date on the document: 04/08/2010
Order Approving Plan Of Allocation Of Settlement Proceeds
Type: Order		Date on the document: 04/08/2010
Order Awarding Lead Counsel's Attorneys' Fees And Expenses
Type: Order Approving AF&E		Date on the document: 04/08/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/08/2010

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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