According to the firm's 10-K filing dated 4/02/2001, on December 20, 2000, the Court granted final approval to the settlement agreement Pegasystems entered into with the Gelfer plaintiffs on behalf of the Gelfer class approving the terms of the settlement as fair, reasonable and adequate and in the best interests of the class, and dismissing the action with prejudice. Pursuant to the Court's final order, the Company issued to the Settlement Fund 1,740,000 shares of Pegasystems common stock and contributed $2.39 million in cash. Certain members of the Board of Directors purchased the shares from the Settlement Fund for $5.36 million in cash. Together with cash previously advanced, the total value paid to the class for the settlement of the Gelfer litigation was $12.25 million.
The original complaint charges that defendants issued materially false and misleading statements during the Class Period about its 1998 revenues and earnings. On November 24, 1998, Pegasystems revealed that it would delay the filing of its quarterly report because it was "reviewing certain revenue transactions" and that it expected "adjustments to results of operations" which had been released just three weeks earlier.