According to the Order, dated November 3, 2004, from U.S. District Judge William G. Young of the US District Court for the District of Massachusetts, the Motion to Dismiss filed by Parametric Technology Corporation and other Defendants is allowed. The next day, on November 4, the Court entered the Order dismissing the case.
The complaint charges 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 materially false and misleading statements to the market between October 19, 1999 and December 31, 2002. The complaint alleges that, throughout the Class Period, Parametric issued numerous statements and filed quarterly and annual reports with the SEC which described the Company's supposedly increasing revenues and financial performance. These statements were materially false and misleading when made, the complaint alleges, because the Company had overstated its revenue since fiscal 1999, in violation of generally accepted accounting principles and because the Company lacked adequate internal controls and was unable to accurately determine and report the Company's financial condition. On December 31, 2002, after the close of
regular trading, Parametric issued a press release announcing a "$20 to
$25 million of previously recognized maintenance revenue which should
have been deferred and recognized in fiscal 2003 and later periods."
Accordingly, the Company announced, it "expects to report a corresponding reduction in maintenance revenue in prior periods, primarily in fiscal year 2002." In reaction, on January 2, 2003, shares of Parametric closed at $2.19 per share, after hitting an intraday low of $1.95, as compared with a Class Period high of $32.88 per share, reached on December 16, 1999.