According to the Company’s Form 10-Q for the quarterly period ended September 30, 2001, the Court appointed a Lead Plaintiff on March 9, 2001. A Consolidated Amended Complaint was filed on April 24, 2001. The Consolidated Amended Complaint is substantially similar to the prior complaints. On October 23, 2001, the Court dismissed the Consolidated Amended Complaint for failure to state a claim upon which relief may be granted.
The original complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information about the Company's financial condition and acquisitions. Specifically, the Complaint alleges that the Defendants characterized the acquisitions as "complementary" to S1 while touting financial "growth milestones." In fact, the Defendants knew or recklessly disregarded that S1's margins and revenues from software licensing would be negatively impacted going forward as a result of the acquisitions, and that the acquired companies had business models incompatible with S1's and which would require significant time and expense to integrate. As a result of these false and misleading statements the Company's stock traded at artificially inflated prices during the class period. Prior to the disclosure of the above mentioned adverse facts, certain insiders took advantage of the inflated stock price by selling thousands of shares of S1 common stock to the unsuspecting public,
generating over $48,000,000 in proceeds. When the truth about the Company was revealed, the price of the stock dropped significantly.