On April 26, 2000, the Court entered a Judgment by U.S. District Judge John W. Sedwick granting the defendants motion, recorded in the Minute Entry on March 23, 2000, to dismiss both the consolidated amended complaint and the class action complaint.
As summarized by the Company’s FORM 10-K for the fiscal year ended December 31, 1999, following the filing of the Bernat action, lawsuits were filed by Norman Wiss, Theodore J. Bloukos, Gwen Werboski, Elmer S. Martin, Linda May, Ivan Sommer, David Hesrick and Michael J. Corn all purporting to act on behalf of the same class of shareholders for the same class period, making substantially similar allegations. These actions were consolidated into one action by an order of the U.S. District Court. Pursuant to the Court’s order, plaintiffs filed a Consolidated and Amended Class Action Complaint which supercedes their prior complaints. The Consolidated and Amended Class Action Complaint alleges a new class period of December 1, 1997 through July 30, 1998, and omits allegations that the Company misrepresented its financial statements. Plaintiffs also filed a new Class Action Complaint that attempts to allege claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 on behalf of all purchasers of our common stock issued pursuant to the Company's secondary public offering on May 5, 1998. The Company has filed motions to dismiss the Consolidated and Amended Class Action Complaint and the Class Action Complaint and a motion to strike the Class Action Complaint. These motions are fully briefed and under submission with the U.S. District Court.
The original Complaint charges that JDAS and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by misrepresenting or failing to disclose material information about JDAS? operations and financial condition. According to the Complaint, defendants overstated its reported revenues and earnings, misled investors about demands for its products and services, and reported revenue and earnings growth throughout 1998 and 1999. More specifically, defendants failed to disclose significant problems with its new products, declining revenues from its licensing operations and disarray among its sales force. On January 5, 1999, JDA software disclosed that it would restate its third quarter 1998 results and would post a significant loss for the fourth quarter of 1998. Following JDAS' January 5, 1999 announcement, the investing public reacted strongly as the price of JDAS common stock plunged to $6 1/6 per share, more than 80% lower than the price at which defendants sold more than $140 million of JDAS stock. In addition, certain JDAS senior officers sold $43 million of their own JDAS stock while in possession of material non-public information about JDAS. What is more, JDAS itself issued and sold more than $90 million of stock via a public offering.