Case Page

 

Case Status:    DISMISSED    
On or around 10/07/2005 (Other)

Filing Date: April 11, 2005

According to a press release dated October 10, 2005, Blue Coat Systems Inc. said after the closing bell on Monday that the securities class action lawsuit filed against the company and certain of its current and former officers has been voluntarily dismissed without prejudice by the lead plaintiff. The lawsuit concerned the fourth quarter of fiscal 2004, the Sunnyvale, Calif.-based provider of proxy appliances said.

The Complaint charges Blue Coat, and certain of the Company's executive officers with violations of federal securities laws. Plaintiff claims defendants' omissions and material misrepresentations artificially inflated the Company's stock price, inflicting damages on investors. Blue Coat is a developer and distributor of "proxy" software, which helps corporations control employee access to Internet websites and to potentially dangerous downloadable files. The Complaint alleges that, from its founding in 1996 through the beginning of the Class period, Blue Coat had never turned a profit. On February 19, 2004, Blue Coat announced an unprecedented increase in sales, and its first profitable quarter. During a public conference call that same day, defendants stated a belief that gross margins in the following quarter would fall in the range of 68-69%. This news drove the stock price up to $38.27 on February 20, 2004, on unusually high volume of 1.3 million shares. Unbeknownst to investors, these gross margin calculations did not reflect any realistic expectations as to what could be achieved, given material business issues of which the defendants would have been aware. Almost immediately following the February 19 conference call, certain defendants began selling large blocks of shares, at prices ranging from $40-52 per share.

The complaint further alleges that on or around May 27, 2004, Blue Coat made a surprise announcement that its purported gross margin calculations had fallen short for the fourth quarter of fiscal 2004 and profitability was lower than that achieved in the third quarter. The next trading day, May 28, 2004, Blue Coat shares plummeted $11.45 per share to close at $27.80 per share. By August 2004, Blue Coat shares fell as low as $10 per share before recovering to approximately the $20 level.

The complaint also states that in the summer of 2004, the SEC began an informal inquiry into trading of Blue Coat stock in or about the fourth quarter of fiscal 2004, which the Company initially characterized as involving only "individuals or organizations outside the company." By early 2005, however, the SEC had upgraded its inquiry to a formal investigation. Instead of only individuals or organizations outside the Company, the SEC was now focusing on "whether certain present or former officers, directors, employees, affiliates or others made intentional or non-intentional selective disclosure of material nonpublic information, traded in the Company's stock while in possession of such information, or communicated such information to others who thereafter traded in the Company's stock."

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Networks
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: BCSI
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: N.D. California
DOCKET #: 05-CV-01468
JUDGE: Hon. Marilyn H. Patel
DATE FILED: 04/11/2005
CLASS PERIOD START: 02/20/2004
CLASS PERIOD END: 05/27/2004
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman DeValerio Pease Tabacco Burt & Pucillo (CA)
    425 California Street, Suite 2025, Berman DeValerio Pease Tabacco Burt & Pucillo (CA), CA 94104
    415.433.3200 415.433.6382 ·
  2. Brodsky & Smith, LLC (former Pennysylvania)
    11 Bala Avenue, Suite 39, Brodsky & Smith, LLC (former Pennysylvania), PA 19004
    610.668.7987 610.660.0450 · esmith@Brodsky-Smith.com
  3. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC)
    1100 New York Avenue, N.W., Suite 500, West Tower, Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC), DC 20005
    202.408.4600 202.408.4699 · lawinfo@cmht.com
  4. Dyer & Shuman, LLP
    801 East 17th Avenue, Dyer & Shuman, LLP, CO 80218-1417
    303.861.3003 800.711.6483 · info@dyershuman.com
  5. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  6. Glancy Binkow & Goldberg LLP (SF)
    455 Market Street, Suite 1810, Glancy Binkow & Goldberg LLP (SF), CA 94105
    415.972.81 415.972-816 · info@glancylaw.com
  7. Lasky & Rifkind, Ltd.
    100 Park Avenue, Lasky & Rifkind, Ltd., NY 10017
    212.907.0800 212.684.6083 ·
  8. Law Offices of Brian M. Felgoise, P.C.
    Esquire at 261 Old York Road, Suite 423, Law Offices of Brian M. Felgoise, P.C., PA 19046
    215.886.1900 · securitiesfraud@comcast.net
  9. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  10. Paskowitz & Associates
    60 East 42nd Street, 46th Floor, Paskowitz & Associates, NY 10165
    212.685.0969 212.685.2306 · classattorney@aol.com
  11. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  12. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  13. Spector Roseman & Kodroff (San Diego)
    1818 Market Street, Suite 2500, Spector Roseman & Kodroff (San Diego), PA 19103
    215.496.0300 215.496.6611 ·
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