On July 2, 2007, the Court entered the Final Judgment and Order signed by U.S. District Judge Richard M. Berman settling the action.
According to a press release dated July 31, 2007, on June 20, 2007, the U.S. District Court for the Southern District of New York denied lead counsel's motion to submit its application for attorneys' fees in camera, finding that the counsel failed to show that justice required the records be reviewed under seal. The lead counsel in a securities fraud class action against Check Point applied for attorneys' fees and expenses with the court, seeking $3.35 million. The attorneys asserted that they spent over 550 billable hours for fact research, investigation and damage, over 300 billable hours filing the complaint and amending it, 400 billable hours for drafting and filing oppositions to motions to dismiss, and 275 billable hours reviewing documents and engaging in discovery. The lead counsel moved to submit their attorney's fees application in camera, asserting that the application contained privileged attorney work product. In camera review allowed if justice requires. The district court found that counsel failed to show that justice required an in camera review of the documents. The district court denied the motion for an in camera review of the attorney's fees application and instructed the lead counsel to redact protected portions of their application.
As summarized by the Company’s FORM 20-F For The Fiscal Year Ended December 31, 2006, beginning on August 29, 2003, we received a number of class action complaints filed in the United States District Court for the Southern District of New York by holders of our ordinary shares, alleging violations of the United States federal securities laws. On January 14, 2004, the court-appointed lead plaintiffs filed a Consolidated Amended Complaint on behalf of a putative class of all purchasers of ordinary shares between July 10, 2001 and April 4, 2002. The complaint generally alleges that we and certain of our senior officers made misrepresentations and omissions regarding, among other things, our sales and future prospects. We retained counsel and filed a motion to dismiss the complaint. On March 7, 2005 the District Court granted our motion to dismiss but permitted the lead plaintiffs to file an amended complaint to attempt to cure the defects in the dismissed complaint. On September 2, 2005, we filed a motion to dismiss this complaint. On April 25, 2006, the court denied our motion to dismiss. On December 20, 2006, we reached an agreement-in-principle with the lead plaintiffs to settle this matter. We expect that the settlement of $13 million will be paid by our insurance carrier. The settlement is subject to the completion of appropriate documentation and to court approval. Also on December 20, 2006, the lead plaintiffs dismissed without prejudice the senior officers named as defendants in the lawsuit.
The original complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Throughout the Class Period, as alleged in the complaint, defendants issued numerous statements concerning Check Point’s revenue growth, product and marketing initiatives, and increasing revenues and profits while failing to disclose that demand for the Company’s products was materially declining. When this information was belatedly disclosed to the market on April 4, 2002, shares of Check Point fell over 24% on extremely heavy trading volume.