Case Page

 

Case Status:    SETTLED
On or around 10/06/2009 (Date of order of final judgment)

Filing Date: August 16, 2001

On November 05, 2001, an order was entered to consolidate the IPO cases into one with the case number 01-CV-7666. In addition, an omnibus order was entered on May 30, 2002 to approve the appointment of a certain individual as lead plaintiff and the selection of lead counsel. At the same time, an amended complaint was also filed. No order of final judgment has been entered yet and the case is still open.

According to a Press Release dated August 16, 2001, the complaint alleges that at the time of Keynote's IPO and secondary offering, they violated the federal securities laws by issuing and selling Keynote Systems common stock pursuant to the initial public offering without disclosing to investors that at least one of the lead underwriters of the IPO and secondary offering had solicited and received excessive and undisclosed commissions from certain investors. In exchange for the excessive commissions, the complaint alleges, lead underwriter FleetBoston Robertson Stephens, Inc. allocated Keynote Systems shares to customers at the IPO price of $14.00 per share. To receive the allocations (i.e., the ability to purchase shares) at $14.00, the defendant underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices.
The requirement that customers make additional purchases at progressively higher prices as the price of Keynote Systems stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive Keynote's share price up to artificially high levels. This artificial price inflation, the complaint alleges, enabled both the defendant underwriters and their customers to reap enormous profits by buying Keynote Systems stock at the $14.00 IPO price and then selling it later for a profit at inflated aftermarket prices, which rose as high as $28.00 during Keynote's first day of trading. The complaint further alleges that Keynote was able to price its secondary offering at the artificially high price of $105.00 per share due to the continuing effects of the foregoing violations. The complaint further alleges that defendants violated the Securities Act of 1933 because the Prospectuses distributed to investors and the Registration Statements filed with the SEC in order to gain regulatory approval for the Keynote offerings contained material misstatements regarding the commissions that the underwriters derived from the IPO and failed to disclose the additional commissions and "laddering" scheme discussed above.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: KEYN
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: S.D. New York
DOCKET #: 01-CV-7666
JUDGE: Hon. Shira A. Scheindlin
DATE FILED: 08/16/2001
CLASS PERIOD START: 09/24/1999
CLASS PERIOD END: 08/15/2001
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  2. Lovell Stewart Halebian LLP (former New York)
    500 Fifth Avenue, Lovell Stewart Halebian LLP (former New York), NY 10110
    212.608.1900 212.719.4677 · info@lshllp.com
  3. 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 ·
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 01-CV-7666
JUDGE: Hon. Shira A. Scheindlin
DATE FILED: 04/19/2002
CLASS PERIOD START: 09/24/1999
CLASS PERIOD END: 12/06/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
  2. 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 ·
  3. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  4. Sirota & Sirota LLP
    110 Wall Street 21st Floor, Sirota & Sirota LLP, NY 10005
    888.759.2990 212.425.9093 · Info@SirotaLaw.com
  5. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  6. 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
No Document Title Filing Date