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Case Status:    DISMISSED    
On or around 06/21/2005 (Other)

Filing Date: March 05, 2004

According to a press release dated June 13, 2005, Activision said in a 10-K SEC filing late last week that a consolidated lawsuit seeking class action status was dismissed May 16 in Cal. because the plaintiffs "failed to satisfy the heightened pleading standards" of the Private Securities Litigation Reform Act. The lawsuit was first filed against the company and some current and former officers and board members March 5, 2004, charging that the publisher's revenue and assets were overstated Feb. 1, 2001-Dec. 17, 2002. Five additional suits seeking class action status have been filed against Activision since, and all 6 were combined into one case. The publisher said the lead plaintiffs were given the chance to file an amended consolidated suit within 30 days of May 16. Activision said "we do not know whether the lead plaintiffs will file an amended consolidated complaint, but in the event that one is filed, we intend to vigorously defend the case at such time." Two derivative suits were also filed against Activision that named all current directors as defendants.

The complaint charges defendants with violations of the Securities Exchange Act of 1934. The complaint alleges that as part of their effort to boost the price of Activision stock, defendants misrepresented Activision's true prospects in an effort to conceal Activision's improper acts until they were able to sell at least $483 million worth of their own Activision stock, including a $250 million secondary offering by the Company. In order to overstate revenues and assets during the Class Period, Activision violated Generally Accepted Accounting Principles and SEC rules by engaging in an illegal accounting scheme.

Specifically, the complaint alleges that defendants' scheme had the effect of dramatically overstating revenues and assets. The true facts, known to the defendants but concealed from the investing public, were that: (i) Activision would ship products to retail customers that the defendants knew or consciously disregarded would subsequently be returned to Activision, usually within 45-60 days of the original shipment; (ii) the Company improperly booked revenue on 'consignment sales' in which the customer had the right to return product to Activision; (iii) when large orders came in from certain customers in Activision's Southern region, certain of these orders would be shipped to the customers, but the products would subsequently be returned to Activision (the physical returns were made to the point-of-origin, i.e., whichever of the third-party manufacturers had originally made and shipped the order); (iv) the Company failed to account for Return Request Authorizations; (v) Activision utilized 'side-letter agreements' with customers, providing extended payment terms or other beneficial terms for the customer that were not included in the formal documentation associated with the order; (vi) there were some products that were so bug-ridden that the problems were never resolved and the products were shipped anyway, only to be returned or require upgrades in the future; (vii) Activision would often re-package old products as being new or updated versions, when, in fact, these supposedly new products were barely different than the preceding versions; and (viii) as a result of the above, the Company's projections and even its reported earnings during the Class Period were grossly overstated and misleading.

COMPANY INFORMATION:

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

SECURITIES INFORMATION:

Ticker Symbol: ATVI
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: C.D. California
DOCKET #: 04-CV-1501
JUDGE: Hon. Percy Anderson
DATE FILED: 03/05/2004
CLASS PERIOD START: 02/01/2001
CLASS PERIOD END: 12/17/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
  2. Cauley Geller Bowman Coates & Rudman, LLP (New York)
  3. Law Offices of Brian M. Felgoise, P.C.
  4. Law Offices of Charles J. Piven, P.A.
  5. Milberg Weiss Bershad Hynes & Lerach LLP (S.F., CA)
  6. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
  7. Schatz & Nobel, P.C.
  8. Stull, Stull & Brody (Los Angeles)
  9. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
No Document Title Filing Date
COURT: C.D. California
DOCKET #: 04-CV-1501
JUDGE: Hon. Percy Anderson
DATE FILED: 10/12/2004
CLASS PERIOD START: 02/01/2001
CLASS PERIOD END: 12/17/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Barrack, Rodos & Bacine (Main office, Philadelphia)
    Two Commerce Square, 2001 Market Street, Suite 3300 , Barrack, Rodos & Bacine (Main office, Philadelphia), PA 19103
    215.963.0600 215.963.0838 · info@barrack.com
  2. Barrack, Rodos & Bacine (San Diego - former)
    402 West Broadway , Barrack, Rodos & Bacine (San Diego - former), CA 92101
    619.230.0800 619.230.1874 · info@barrack.com
  3. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    401 B Street, Suite 1700, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    206.749.5544 206.749.9978 · info@lerachlaw.com
  4. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Seattle)
    1700 Seventh Avenue, Suite 2260 , Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Seattle), WA 98101
    206-749-5544 206.749-9978 ·
  5. Lim, Ruger & Kim, LLP
    1055 West Seventh Street, Suite 2800, Lim, Ruger & Kim, LLP, CA 90017
    213-955-9500 213-955-9511 · info@lrklawyers.com
  6. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date
—Related District Court Filings Data is not available