According the docket posted, on March 6, 2006, the Court entered the Order and Final Judgment signed by U.S. District Judge Joseph L. Tauro. The settlement was approved and the civil case was terminated.
As reported by the Company’s Form 10-Q For The Quarter Ended December 31, 2005, following mediation, on November 16, 2005, the Company and the plaintiffs on behalf of putative class members entered into a Stipulation and Agreement of Compromise, Settlement and Release of Securities Action which was filed with the court on the same date. On December 12, 2005, the court granted preliminary approval of the settlement provided for in the stipulation and set a hearing date of March 6, 2006 to consider final approval of the settlement. Pursuant to the terms of the settlement, a total of $5.6 million has been paid into a settlement fund by the Company and its insurance carrier. The settlement remains subject to the satisfaction of various conditions, including final approval by the court. As part of the settlement, the plaintiffs have agreed to dismiss the class action lawsuit with prejudice effective upon entry of final judgment after court approval.
According to the same SEC filing, in November 2004, two putative class action lawsuits were filed against the Company in the United States District Court District of Massachusetts, captioned, respectively, Fener v. Aspen Technology, Inc., et. al., Civil Action No. 04-12375 (D. Mass.) (filed Nov. 9, 2004) and Stockmaster v. Aspen Technology, Inc., et. al., Civil Action No. 04-12387 (D. Mass.) (filed Nov. 10, 2004). The class actions allege, among other things, that the Company violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder in connection with various statements about our financial condition for fiscal years 2000 through 2004. On February 2, 2005, the court consolidated the cases under the caption Aspen Technology, Inc. Securities Litigation, Civil Action No. 04-12375 (D. Mass.), and appointed The Operating Engineers and Construction Industry and Miscellaneous Pension Fund (Local 66) and City of Roseville Employees’ Retirement System as lead plaintiff, purporting to represent a putative class of persons who purchased the Company’s common stock between January 25, 2000 and October 29, 2004. On August 26, 2005, the plaintiffs filed a consolidated amended complaint containing allegations materially similar to the prior complaints and expanding the class action period.
The original complaint charges Aspen and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. 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 inappropriately recognized revenues from certain software license and service agreements entered into with certain alliance partners and other customers during fiscal years 2000-2002; (2) that the Company's financial results were in violation of Generally Accepted Accounting Principles ("GAAP"); (3) that the Company lacked adequate internal controls; and (4) that as a result of the above, the Company's financial results were materially inflated at all relevant times.
The complaint further alleges that on October 27, 2004, Aspen announced that its Audit Committee had undertaken a detailed review of the accounting for certain software license and service agreement transactions entered into with certain alliance partners and other customers during fiscal years 2000-2002. This news shocked the market. Shares of Aspen fell $.20 per share, or 2.91 percent, on October 28, 2004, to close at $6.68 per share. On October 29, 2004, Aspen said federal prosecutors had launched a probe into the software company's accounting practices from 2000 through 2002. On this news, Aspen's shares tumbled a further $.67 per share, or 10.03 percent, on October 29, 2004, to close at $6.01 per share.