Sonus Networks, Inc. ("Sonus" or the Company) is a communications distributor that offers mobile network operation and Microsoft solutions.

The Complaint charges Sonus and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the Complaint alleges that, throughout the Class Period, Defendants issued numerous statements to the market concerning the Company's financial results, which failed to disclose and/or misrepresented the following adverse facts, among others: (a) that Defendants had improperly and untimely recognized revenue on certain of the Company's customer transactions; (b) that Defendants violated Generally Accepted Accounting Principles and the Company's own internal policies regarding the timing of revenue recognition; and (c) as a result of the foregoing, the Company's revenues, net income and earnings per share published during the Class Period were materially false and misleading. On February 11, 2004, after the close of regular trading, Sonus shocked the market when it announced that the Company had identified certain issues, practices and actions of certain employees relating to both the timing of revenue recognized from certain customer transactions and to certain other financial statement accounts, which may affect the Company's 2003 financial statements and possibly financial statements for prior periods. Prior to disclosing these adverse facts, Sonus completed a $126.14 million public offering, and Sonus insiders sold approximately $2 million of their personally held shares to the unsuspecting public. The next morning, when the market opened for trading, shares of the Company's stock fell as low as $5.02 per share, a decline of $1.67 per share, or 24.9%, on extremely high trading volume.

As disclosed by the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, beginning in February 2004, a number of purported shareholder class action Complaints were filed in the United States District Court for the District of Massachusetts against Sonus and certain of its current officers and directors. On June 28, 2004, the court consolidated the claims. On December 1, 2004, the lead Plaintiff filed a consolidated amended Complaint. The Complaint asserts claims under the federal securities laws, specifically Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12(a), and 15 of the Securities Act of 1933, relating to Sonus’ restatement of its financial results for 2001, 2002, and the first three quarters of 2003. Specifically, the Complaint alleges that Sonus issued a series of false or misleading statements to the market concerning revenues, earnings, and financial position. Plaintiffs contend that such statements caused Sonus’ stock price to be artificially inflated. The Complaint seeks unspecified damages on behalf of a purported class of purchasers of Sonus’ common stock during the period from March 28, 2002 through March 26, 2004. On January 28, 2005, Sonus filed a motion to dismiss the Section 10(b) and 12(a) claims and joined the motion to dismiss the Section 11 claim filed by the individual Defendants. On June 1, 2005, the court held a hearing on the motion and allowed the Plaintiff to file an amended Complaint. The Plaintiff filed an amended Complaint that included the same claims and substantially similar allegations as set forth in the prior Complaint. On September 12, 2005, the Defendants filed motions to dismiss this amended Complaint. On December 10, 2005, the court held a hearing on the motions and took the matter under advisement.

On May 10, 2006, U.S. District Judge Douglas P. Woodlock issued the Memoradum and Order granting in part and denying in part the Defendants’ motions to dismiss the First Amended Consolidated Class Action Complaint. On July 31, 2006, the Plaintiff filed a motion to certify the class. On June 29, 2007, Sonus filed a motion for reconsideration of the judge's ruling denying their motion to dismiss. Defendants claim that in light of the Supreme Court's recent ruling in the Tellabs v Makor case, the "fraudulent intent may be plausible, yet less cogent, than other, nonculpable explanations for the defendant's conduct."

According to an article dated October 31, 2007, the U.S. District Court for the District of Massachusetts granted a stock broker's motion for class certification of a securities fraud class action against Sonus, finding that the broker had standing to sue the Company because it purchased the stock directly and relied upon the Company's alleged misrepresentations to buy the stock.

According to a press release dated November 8, 2007, on November 7, 2007, the Company reached an agreement to settle litigation against the Company and certain of its former and current officers alleging violations of federal securities laws in connection with the Company's 2004 restatement. Pursuant to the settlement, which is subject to court approval, the Company has agreed to pay $40 million to the shareholder classes in the case. The Company has recorded a $40 million charge and related liability in the third quarter of fiscal 2007 for the full amount of the settlement.

On March 31, 2008 the judge entered his Final Order finalizing the settlement and dismissing the case with prejudice. In the same order he awarding Counsel 25% of the settlement in attorneys' fees and reimbursed out-of-pocket expenses in the amount of $383,790.94. According to Sonus' Form 10-K filed on March 8, 2008 the $40 million settlement reached their insurance coverage limits.