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Case Status:    SETTLED
On or around 03/14/2005 (Date of order of final judgment)

Filing Date: July 23, 2002

According to a press release dated March 14, 2005, HPL Technologies, Inc. announced that the United States District Court for the Northern District of California on March 11, 2005, approved the settlement of the securities class action pending against HPL and other defendants.

HPL has also settled its litigation in connection with the acquisition of Covalar Technologies Group, Inc. filed in Texas State Court and the acquisition of FabCentric, Inc. filed in California State Court, both of which were contingent upon the final approval of the federal securities class action litigation. The total cost to the Company in settling all of its litigation in connection with its financial restatement, previously announced on July 19, 2002, is the issuance of approximately 9,665,000 new common shares. All cash payments to be made in the settlements are being funded by directors' and officers' liability insurance.

According to a press release dated July 2, 2004, agreements in principle were reached to settle the consolidated federal securities class action pending in the United States District Court for the Northern District of California and a separate lawsuit brought in Texas state court by former shareholders of Covalar Technologies Group, Inc. Final settlement of these matters is contingent on certain conditions, including execution of formal settlement stipulations and court approval. Under the terms of the settlements, HPL expects to issue 7 million new shares of its common stock.

The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of HPL Technologies securities. The complaint alleges that throughout the Class Period defendants engaged in a massive fraud to, among other things, inflate HPL's revenues. The complaint alleges that defendant made a series of misleading statement starting on July, 31, 2001. The complaint alleges that the press releases dated August 17, 2001, October 24, 2001, January 29, 2002, and May 9, 2002 were materially false and misleading. The complaint alleges that the company's Form 10-Qs for the first quarters ended June 30, 2001; September 30, 2001; and December 31, 2001 were materially false and misleading. In addition, the complaint alleges that the Company's Form 10-K for the fiscal year ended March 31, 2002 was materially false and misleading. The complaint alleges that each of these above referenced press releases and SEC filings materially misrepresented HPL's revenues and growth as ultimately admitted on July 19, 2002, the day the HPL announced that it had initiated an investigation into accounting irregularities. Finally, HPL announced that it had uncovered a massive accounting fraud involving "fictitious transactions" and "falsified documents." The company said that what was reported as cash on its balance sheet "is not now, and may never have been in the Company's possession." HPL further reported that, "at least $11 million of the $13.7 million in revenue reported in the quarter ended March 31 was based on fake transactions with the company's Japanese distributor, Canon Sales, Co." The Company said that it will restate financial results for fiscal 2002 and may restate for fiscal 2001. The Company also announced that it has fired it CEO and Chairman; defendant David Lepejian, who apparently was a "central player" in the fraud. As a result of defendants' materially false and misleading statements the price of HDL common stock was inflated throughout the Class Period.

COMPANY INFORMATION:

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

SECURITIES INFORMATION:

Ticker Symbol: HPLA
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: N.D. California
DOCKET #: 02-CV-3510
JUDGE: Hon. Vaughn R. Walker
DATE FILED: 07/23/2002
CLASS PERIOD START: 07/31/2001
CLASS PERIOD END: 07/19/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Abbey Gardy, LLP (New York)
    212 East 39th Street, Abbey Gardy, LLP (New York), NY 10016
    212.889.3700 · info@abbeygardy.com
  2. Berman DeValerio Pease Tabacco Burt & Pucillo (MA)
    One Liberty Square, Berman DeValerio Pease Tabacco Burt & Pucillo (MA), MA 2109
    617.542.8300 617.230.0903 · info@bermanesq.com
  3. Cauley, Geller, Bowman, Coates & Rudman LLP (San Diego, CA)
    225 Broadway, Suite 1900, Cauley, Geller, Bowman, Coates & Rudman LLP (San Diego, CA), CA 92010
    619.702.7350 619.702.7351 ·
  4. Glancy Binkow & GoldBerg LLP
    1925 Century Park East, Suite 2100, Glancy Binkow & GoldBerg LLP, CA 90067
    310-201-9150 · info@glancylaw.com
  5. Gold Bennett Cera & Sidener LLP
    595 Market Street, Suite 2300, Gold Bennett Cera & Sidener LLP, CA 94105-2835
    800.778.1822 415.777.5189 · info@gbcsf.com
  6. Green & Jigarjian LLP
    235 Pine Street, 15th Floor, Green & Jigarjian LLP, CA 94104
    415.477.6700 415.477.6710 ·
  7. Kaplan Fox & Kilsheimer, LLP (San Francisco, CA)
    100 Pine Street, 26th Floor, Kaplan Fox & Kilsheimer, LLP (San Francisco, CA), CA 94111
    415.772.4700 415.677.1233 · info@kaplanfox.com
  8. Much Shelist Freed Denenberg Ament & Rubenstein, PC

    800-470-6824 312-621-1750 ·
  9. Neiman, Garland, and Urbach

    866-539-3788 · jeffreyneiman@aol.com
  10. Spector Roseman & Kodroff (San Diego)
    1818 Market Street, Suite 2500, Spector Roseman & Kodroff (San Diego), PA 19103
    215.496.0300 215.496.6611 ·
  11. 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
  12. Wechsler Harwood LLP
    488 Madison Avenue 8th Floor, Wechsler Harwood LLP, NY 10022
    212.935.7400 · info@whhf.com
  13. Weiss & Yourman (New York, NY)
    The French Building, 551 Fifth Ave., Suite 1600, Weiss & Yourman (New York, NY), NY 10126
    212.682.3025 212.682.3010 · info@wyca.com
  14. Zwerling, Schachter, Zwerling & Koppell LLP
    767 Third Avenue , Zwerling, Schachter, Zwerling & Koppell LLP, NY 10017
    ·
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 02-CV-3510
JUDGE: Hon. Vaughn R. Walker
DATE FILED: 12/01/2003
CLASS PERIOD START: 07/31/2001
CLASS PERIOD END: 07/18/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Gold Bennett Cera & Sidener LLP
    595 Market Street, Suite 2300, Gold Bennett Cera & Sidener LLP, CA 94105-2835
    800.778.1822 415.777.5189 · info@gbcsf.com
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