Case Page

 

Case Status:    DISMISSED    
On or around 06/05/2007 (Date of order of final judgment)

Filing Date: August 06, 2004

The original complaint charges Ceridian and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants caused Ceridian's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements, which included the improper capitalization as assets of certain costs which should have been expensed. Defendants took advantage of the inflated share price by selling 216,298 shares of their individual Ceridian holdings for proceeds of $3.9 million. On February 18, 2004, the Company announced it would restate its 2000-2003 financials due to a revenue recognition change within its Stored Value System business unit. The Company's stock declined on this news. However, the stock soon recovered due to defendants' assurances that the change was limited in scope and would not materially impact futures results.

On July 19, 2004, the Company announced the postponement of its Q2 04 earnings release and investor call. According to the complaint, the defendants were struggling to conceal that the Company's capitalization and expensing of certain costs in its U.S. Human Resource Solutions ('HR Solutions') business were false. This false accounting will adversely impact the Company's Q2 04 results as well as previously reported periods and guidance. This was the second time in as many quarters that an accounting issue had taken center stage for the Company. On this news, Ceridian's stock price dropped to $18.20 per share, on volume of 6.8 million shares.The complaint further alleges that defendants' revelations indicate that the Company's comprehensive HR Solutions deals, which often require upfront customization work during the implementation process, were falsely accounted for. The Company had been capitalizing these upfront costs rather than expensing them immediately. As a result, the prior results need to be restated. The Company capitalized approximately $30 million of internally developed software expenses in its HR Solutions division in 2003. If expensed, this would reduce 2003 EPS by some $0.13.

Note: Ceridian offers a broad range of managed human resource solutions designed to help companies maximize the value of their people by more effectively managing their work forces and the information that is integral to human resource processes.

The original complaint charges Ceridian and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants caused Ceridian's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements, which included the improper capitalization as assets of certain costs which should have been expensed. Defendants took advantage of the inflated share price by selling 216,298 shares of their individual Ceridian holdings for proceeds of $3.9 million. On February 18, 2004, the Company announced it would restate its 2000-2003 financials due to a revenue recognition change within its Stored Value System business unit. The Company's stock declined on this news. However, the stock soon recovered due to defendants' assurances that the change was limited in scope and would not materially impact futures results.

On July 19, 2004, the Company announced the postponement of its Q2 04 earnings release and investor call. According to the complaint, the defendants were struggling to conceal that the Company's capitalization and expensing of certain costs in its U.S. Human Resource Solutions ('HR Solutions') business were false. This false accounting will adversely impact the Company's Q2 04 results as well as previously reported periods and guidance. This was the second time in as many quarters that an accounting issue had taken center stage for the Company. On this news, Ceridian's stock price dropped to $18.20 per share, on volume of 6.8 million shares.The complaint further alleges that defendants' revelations indicate that the Company's comprehensive HR Solutions deals, which often require upfront customization work during the implementation process, were falsely accounted for. The Company had been capitalizing these upfront costs rather than expensing them immediately. As a result, the prior results need to be restated. The Company capitalized approximately $30 million of internally developed software expenses in its HR Solutions division in 2003. If expensed, this would reduce 2003 EPS by some $0.13.

Note: Ceridian offers a broad range of managed human resource solutions designed to help companies maximize the value of their people by more effectively managing their work forces and the information that is integral to human resource processes.

As summarized by the Company’s FORM 10-Q for the quarterly period ended September 30, 2007, since August 6, 2004, six shareholder lawsuits have been filed against Ceridian Corporation and certain of our former executive officers in the United States District Court, District of Minnesota. Those lawsuits were consolidated into a single case captioned In re Ceridian Corporation Securities Litigation, Case No. 04-cv-03704 PJS-RLE. This consolidated action purports to be a class action filed on behalf of all persons who purchased or otherwise acquired our common stock between April 17, 2003 through and including March 17, 2005, and allege claims against Ceridian and certain of our former executive officers under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Plaintiffs challenge the accuracy of certain public disclosures made by us regarding our financial performance, and in particular our accounting for revenue and expenses, accounting for capitalization, accounting for derivatives, accounting for long-term leases, and accounting for trademarks. Plaintiffs allege, in essence, that our series of restatements constituted a violation of Section 10(b) and 20(a) of the Exchange Act. On May 25, 2006, the United States District Court, District of Minnesota granted our motion to dismiss the consolidated class action complaint and gave leave to the plaintiffs to file an amended complaint. An amended complaint was filed on July 14, 2006. Our motion to dismiss the amended consolidated class action complaint with prejudice was granted on June 5, 2007. Plaintiffs appealed that decision on July 3, 2007.

On September 15, 2008, the Court entered Opinion and Judgment from the Eighth Circuit Court of Appeals which affirmed the judgment of the District Court.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: CEN
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


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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: D. Minnesota
DOCKET #: 04-CV-3704
JUDGE: Hon. John R Tunheim
DATE FILED: 08/06/2004
CLASS PERIOD START: 04/17/2003
CLASS PERIOD END: 07/19/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton)
    197 South Federal Highway, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Boca Raton), FL 33432
    561.750.3000 56.750.3364 · info@lerachlaw.com
  2. 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
  3. Reinhardt, Wendorf & Blanchfield Attorneys at Law
    E-1000 First National Bank Building, 332 Minnesota Street, Reinhardt, Wendorf & Blanchfield Attorneys at Law, MN 55101
    800.465.1592 651.297.6543 · info@ralawfirm.com
No Document Title Filing Date
COURT: D. Minnesota
DOCKET #: 04-CV-3704
JUDGE: Hon. John R Tunheim
DATE FILED: 07/14/2006
CLASS PERIOD START: 04/17/2003
CLASS PERIOD END: 03/17/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco)
    100 Pine Street, Suite 2600, Lerach Coughlin Stoia Geller Rudman & Robbin (San Francisco), CA 94111
    415.288.4545 415.288.4534 · info@lerachlaw.com
  2. Reinhardt, Wendorf & Blanchfield Attorneys at Law
    E-1000 First National Bank Building, 332 Minnesota Street, Reinhardt, Wendorf & Blanchfield Attorneys at Law, MN 55101
    800.465.1592 651.297.6543 · info@ralawfirm.com
No Document Title Filing Date
No Document Title Filing Date
No Document Title Filing Date