According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, on March 14, 2006, the United States District Court for the Northern
District of Illinois dismissed, with prejudice, all of the claims against SPSS and certain of its officers. The plaintiffs had 30 days from the entry of the court's judgment to file a notice of appeal. As of the date of this filing, no notice of appeal has been received.
On September 10, 2004, the Court entered the Minute Order signed by U.S. District Judge James B. Moran granting the motion of Fred Davis for appointment as lead plaintiff and approval of plaintiff's selection of lead counsel. On September 30, 2004, a First Amended Consolidated Class Action Complaint was filed, and the defendants responded by filing motions to dismiss on December 15, 2004. On May 12, 2005, the Court entered the Memorandum Opinion and Order granting both SPSS defendants' and KPMG's motions to dismiss. On June 24, 2005, a Second Amended Consolidated Class Action Complaint was filed, terminating KPMG LLP. The defendants filed a motion to dismiss on September 1, 2005.
The original Complaint charges that SPSS and certain of its officers 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 material misrepresentations to
the market between May 2, 2001 and March 30, 2004, about the Company's
revenues, thereby artificially inflating the price of SPSS common stock. More
specifically, the Complaint alleges that the Company failed to disclose and
misrepresented the following material adverse facts which were known to
defendants or recklessly disregarded by them: (1) that the Company overstated
its revenue by between $3 million and $6 million; (2) that the Company
accomplished this through improper recognition of revenue in violation of
Generally Accepted Accounting Principles ("GAAP") and the Company's own
accounting interpretations on revenue recognition; (3) the Company's earnings
per share were materially inflated; and (4) that as a result of the above, the
Company's financial results were inflated at all relevant times.
On March 30, 2004, SPSS announced that it would delay the filing of its annual
report on Form 10-K with the United States Securities and Exchange Commission
to complete an additional review initiated by the company. News of this shocked
the market. Shares of SPSS fell $2.55 per share or 12.17 percent on March 31,
2004 to close at $18.40 per share.