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Case Status:    SETTLED
On or around 04/04/2001 (Date of order of final judgment)

Filing Date: March 20, 2000

The original complaint charges MicroStrategy and certain individuals with violations of the Securities Exchange Act of l934 and Rule 10b-5 promulgated thereunder. The complaint alleges that MicroStrategy and certain of its officers and directors reported materially false and misleading financial results throughout the Class Period. During l998 and l999, defendants overstated MicroStrategy's revenues and earnings by improperly recognizing revenue in connection with software sales/service contracts. On March 20, 2000, MicroStrategy admitted that its 1999 and 1998 revenues and operating results had been false due to improper timing of revenue recognition. The Company announced that it must restate its revenues for both fiscal years, which will substantially reduce is 1999 and 1998 results. The Company stated that it will reduce its l999 reported revenue from $205.3 million to between approximately $150 million and $155 million, and its results of operations from diluted net income per share of $0.15 to a diluted loss per share of between approximately $(0.43) and $(0.51). It will also reduce its reported revenues for l998 from $106.4 million to between approximately $95.9 million and $100.9 million and its results of operations from diluted net income per share of $0.08 to diluted net income per share of between approximately $0.04 and $0.01.

By Order dated June 6, 2000, the Court consolidated for all purposes the actions into this Action pursuant to Rule 42(a) of the Federal Rules of Civil Procedure.

By Order dated June 27, 2000, the Court (i) granted the motion of Akiko and
Atsukuni Minami and Local 144 Nursing Home Pension Fund to be appointed Lead Plaintiffs, and (ii) designated the law firms Milberg Weiss Bershad Hynes & Lerach LLP, and Wolf, Haldenstein, Adler, Freeman & Herz LLP as Plaintiffs’ Co-Lead Counsel.

A Consolidated Amended Class Action Complaint was filed on July 7, 2000, naming MicroStrategy, certain of its officers and directors, and PricewaterhouseCoopers LLP as defendants. The amended class action complaint alleges claims under section 10(b), section 20(a) and section 20A of the Exchange Act. The amended class action complaint does not specify the amount of damages sought.

By Order dated August 10, 2000, as subsequently amended on August 25, 2000, the Court (i) conditionally certified the Action to proceed as a class action.

By Order dated September 15, 2000, the Court denied the Defendants’ motions to dismiss the Complaint, with the exception that the Court dismissed a claim that Defendant Frank A. Ingari is liable under Section 20A of the Exchange Act, leaving Defendant Stephen S. Trundle as the sole Defendant against whom such claim remains.

According to the Forms 10-K for the fiscal year ended December 31, 2001 and for 2002, on October 23, 2000, MicroStrategy Inc., its officers and directors named as defendants, and plaintiffs' counsel entered into a settlement agreement in the consolidated class action. Under the settlement agreement, class members will receive: (1) five-year unsecured subordinated promissory notes issued by MicroStrategy having an aggregate principal amount of $80.5 million and bearing interest at 7.5% per year; (2) 2,777,778 shares of MicroStrategy class A common stock; and (3) warrants to purchase 1,900,000 shares of class A common stock at an exercise price of $40 per share with the warrants expiring five years from the date they are issued. The district court approved the settlement on April 2, 2001.

On May 21, 2001, a Stipulation and Agreement of Settlement to settle claims with remaining defendant PricewaterhouseCooper. On July 24, 2001, the settlement in the amount of $55 million was approved.

COMPANY INFORMATION:

Sector: Technology
Industry: Software & Programming
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MSTR
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: E.D. Virginia
DOCKET #: 00-CV-00473
JUDGE: Hon. T. S. Ellis III
DATE FILED: 03/20/2000
CLASS PERIOD START: 06/11/1998
CLASS PERIOD END: 03/20/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Alfred G. Yates, Jr.
    429 Forbes Avenue, Alfred G. Yates, Jr. , PA 15219
    412.391.5164 ·
  2. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  3. Cohen Milstein Hausfeld & Toll PLLC (Seattle WA)
    701 Fifth Avenue, Suite 6860, Cohen Milstein Hausfeld & Toll PLLC (Seattle WA), WA 98014
    206.521.0080 206.521.0166 · lawinfo@cmht.com
  4. Finkelstein & Krinsk LLP
    501 West Broadway, Suit 1250, Finkelstein & Krinsk LLP, CA 92101
    877.493.5366 619.238.5425 ·
  5. Rabin & Peckel LLP
    275 Madison Avenue, 34th Floor, Rabin & Peckel LLP, NY 10016
    212.682.1818 212.682.1892 · email@rabinlaw.com
  6. Spector Roseman & Kodroff (San Diego)
    1818 Market Street, Suite 2500, Spector Roseman & Kodroff (San Diego), PA 19103
    215.496.0300 215.496.6611 ·
  7. Wolf Popper, LLP
    845 Third Avenue, Wolf Popper, LLP, NY 10022-6689
    877.370.7703 212.486.2093 · IRRep@wolfpopper.com
No Document Title Filing Date
COURT: E.D. Virginia
DOCKET #: 00-CV-00473
JUDGE: Hon. T. S. Ellis III
DATE FILED: 07/07/2001
CLASS PERIOD START: 06/11/1998
CLASS PERIOD END: 03/20/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  2. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date