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Case Status:    SETTLED
On or around 08/04/2006 (Date of order of final judgment)

Filing Date: July 23, 2003

According to a press release dated August 9, 2006, a federal judge on Friday approved the $3.15 million settlement of a class-action securities lawsuit against Tripos, a drug-development services and software company based in St. Louis County. The lawsuit alleged Tripos violated the Securities Exchange Act by misleading the public through press releases and Securities and Exchange Commission filings between Feb. 9, 2000, and July 1, 2002. Tripos has also reached an agreement to settle a shareholder derivative action filed Feb. 10 in St. Louis County and the settlement papers will be filed shortly. The circuit court's docket shows the parties have until Monday to finalize the settlement. Because of the nature of the action, the settlement will call for a change in practices. The company will also pay the $200,000 attorneys' fees.

In a press release dated April 4, 2006, Tripos Inc. and two of its executives have agreed to settle a class-action lawsuit brought by shareholders alleging securities fraud, according to documents filed Monday with the Securities and Exchange Commission. The legal settlement, which must be approved by the court, will be covered by Tripos' insurance, the Chief Financial Officer said. He did not disclose the amount. The Company’s Chief Financial Officer as well as its Chief Executive were named along with the company as defendants in the case, filed in 2003 in U.S. District Court in St. Louis. The lawsuit was brought by holders of Tripos shares between February 2000 and July 2002, who claimed the company and its executives inflated financial results and made false or misleading statements about its prospects.

As summarized by the latest docket posted, on October 31, 2003, the Court entered the Order granting the movants’ motion to consolidate, for appointment of lead plaintiffs, and for approval of lead and liaison counsel. On January 30, 2004, the plaintiffs filed an Amended Complaint and on May 5, 2004, the plaintiffs filed a Second Consolidated and Amended Class Action Complaint. On August 3 and August 4, 2004, the defendant Ernst & Young LLP as well as the Tripos and the individual defendants respectively filed motions to dismiss the Second Consolidated and Amended Class Action Complaint. On October 3, 2005, the Court entered the Order granting defendant Ernst & Young's motion to dismiss. On March 21, 2006, the remaining defendants filed a notice of settlement pass for settlement.

The original action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. Specifically, 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 numerous positive statements throughout the Class Period regarding the strong performance of the Company's business, specifically stating that the Company would continue to grow its revenues and earnings and that its book of contracted business was solid.

According to the complaint, throughout the Class Period, Tripos repeatedly touted its supposed backlog of business and existing contracts which, the Company represented, would allow it to achieve 25% to 38% revenue growth and 55% to 67% growth in 2002 earnings, over its record 2001 year. Such representations were materially false and misleading when made because, contrary to the Company's repeated assertions that business was growing, and would continue to grow, defendants knew that the pharmaceutical and biotechnology industries was in the throes of a serious downturn which led, and would continue to lead, to decreased revenues for Tripos.

On July 1, 2002, Tripos issued a press release revising its expected 2002 results materially downwards due to delayed purchase decisions by customers caused by the continuing downturn in the pharmaceutical and biotechnology industries and a missed milestone on a large contract. Instead of delivering on its much-touted strong growth, the Company announced that it expects a loss of $0.20 to $0.25 per share in the second quarter of 2002. Expected revenue for the year was reduced to $53 million to $58 million, from the $60 to $65 million in revenues touted during the Class Period. In response to this announcement, the price of Tripos common stock dropped dramatically, falling from $21.80 per share on June 28, 2002 to close at $8.53 per share on July 1, 2002-a one day decline of 60%, on unusually heavy trading volume.

In addition, the complaint alleges that the Company was experiencing continuing operational problems with its software consulting business, leading to significant cost-overruns on important projects. The complaint alleges that because of these materially negative factors, which were known to defendants, the Company's repeatedly-touted aggressive growth targets for 2002 were lacking in any reasonable basis when made.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Biotechnology & Drugs
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: TRPS
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: E.D. Missouri
DOCKET #: 03-CV-00995
JUDGE: Hon. Stephen N. Limbaugh
DATE FILED: 07/23/2003
CLASS PERIOD START: 01/09/2002
CLASS PERIOD END: 07/01/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Litowitz Berger & Grossmann LLP (New York, NY)
    1285 Avenue of the Americas, 33rd Floor, Bernstein Litowitz Berger & Grossmann LLP (New York, NY), NY 10019
    212.554.1400 212.554.1444 · blbg@blbglaw.com
  2. Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR)
    P.O. Box 25438, Cauley Geller Bowman Coates & Rudman LLP (Little Rock, AR), AR 72221-5438
    501.312.8500 501.312.8505 ·
  3. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  4. 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 ·
  5. Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA)
    100 Pine Street - Suite 2600, Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA), CA 94111
    415.288.4545 415.288.4534 ·
  6. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  7. Milberg Weiss Bershad Hynes & Lerach LLP (Seattle, WA)
    1001 Fourth Avenue - Suite 3200, Milberg Weiss Bershad Hynes & Lerach LLP (Seattle, WA), WA 98154
    206.839.0730 ·
No Document Title Filing Date
COURT: E.D. Missouri
DOCKET #: 03-CV-00995
JUDGE: Hon. Stephen N. Limbaugh
DATE FILED: 05/05/2004
CLASS PERIOD START: 02/09/2000
CLASS PERIOD END: 07/01/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley Geller Bowman & Rudman (Melville)
    200 Broadhollow Road, Suite 406, Cauley Geller Bowman & Rudman (Melville), NY 11747
    631.367.7100 ·
  2. Dysart Taylor Lay Cotter & McMonigle, PC
    4420 Madison Ave, Dysart Taylor Lay Cotter & McMonigle, PC, MO 64111
    816.931.2700 ·
  3. 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
  4. 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