According to the docket, on January 22, 2002, a Stipulation for settlement was filed and on January 24, U.S. District Judge Edward W. Nottingham preliminarily approved the proposed class action settlement. On March 21, 2002, the Court entered the Orders granting the motion for final approval of the class action settlement and the plan of allocation and granting the motion for award of attorneys’ fees and reimbursement of expenses. Representative plaintiffs' counsel was awarded attorneys' fees of 30% of settlement fund and reimbursement. Representative plaintiffs were awarded $3,000 each. The Court further entered the Final Judgment and Order of Dismissal with Prejudice and the case was dismissed.
The complaint charges J.D. Edwards and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that via a series of false and misleading statements regarding the continued strong demand for J.D. Edwards' core WorldSoftware product for the IBM AS/400 operating system, the successful introduction and technological superiority of its most important new product, OneWorld, for the UNIX/Windows NT operating systems, and the successful reorganization of its direct sales force, which it forecast would lead to very strong software license revenue growth, increased profit margins and EPS of $.72-.$90 in F99, defendants artificially inflated J.D. Edwards stock from $24-7/8 in mid 1/98 to a Class Period high of $49-3/8 in 9/98. As J.D. Edwards stock soared to record levels, the nine top insiders at J.D. Edwards sold 3,992,183 shares of their J.D. Edwards stock at prices as high as $49 for $151.5 million in proceeds.
But in December 1998, when J.D. Edwards revealed that its growth of software license revenue had fallen sharply, that the share of its license revenue represented by OneWorld sales had also fallen sharply, indicating a lack of success with this vital new product, and that it was suffering from sales force productivity problems, its stock collapsed from $37 on 12/3/98 to $24 on 12/4/98, a 35% drop.
