Case Page

 

Case Status:    SETTLED
On or around 01/29/2009 (Date of order of final judgment)

Filing Date: May 19, 2005

The original complaint charges Brocade and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Brocade designs, develops, markets, sells and supports data storage networking products and services. Specifically, the complaint alleges that throughout the Class Period, defendants issued materially false and misleading financial statements to the investing public. On May 16, 2005, the Company issued a press release announcing the restatement of its fiscal 2001 to fiscal 2004 earnings. The release stated that "the Company will restate its financial statements for the fiscal years ending 2002 through 2004 to record additional charges for stock-based compensation expense." The release noted that the Company estimated the impact of the restatement would be to reduce fiscal 2001 and fiscal 2002 earnings per share by up to $0.11 and $0.19, respectively. The Company also estimated that fiscal 2003 and fiscal 2004 earnings per share would be reduced as well. As a result of this announcement, Brocade's stock dropped to $4.13 per share, compared to the $40+ per share prices it traded at during the Class Period.

According to the Company’s FORM 10-Q for the quarterly period ended April 26, 2008,
beginning on or about May 19, 2005, several securities class action complaints were filed against Brocade and certain of its then current and former officers. These actions were filed in the United States District Court for the Northern District of California on behalf of purchasers of Brocade’s stock from February 21, 2001 to May 15, 2005. These lawsuits followed and relate to Brocade’s restatement of certain financial results due to stock-based compensation accounting issues. On January 12, 2006, the Court appointed a lead plaintiff and lead counsel. On April 14, 2006, the lead plaintiff filed a consolidated complaint on behalf of purchasers of Brocade’s stock from May 18, 2000 to May 15, 2005. On November 3, 2006, the Court denied Brocade’s motion to dismiss the consolidated complaint and granted certain individual defendants’ motions to dismiss the consolidated complaint with leave to amend. On January 2, 2007, the lead plaintiffs filed an amended consolidated complaint on behalf of purchasers of Brocade’s stock from May 18, 2000 to May 15, 2005. The amended consolidated complaint names the Company and certain of its former officers and directors and alleges, among other things, violations of sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The amended consolidated complaint alleges, among other things, that Brocade and the individual defendants made false or misleading public statements regarding Brocade’s business and operations and seeks unspecified monetary damages and other relief against the defendants. On January 29, 2007, Brocade filed its answer to the amended consolidated complaint. On August 7, 2007, a federal jury convicted Brocade’s former Chief Executive Officer, Gregory Reyes, on ten criminal counts related to the Company’s historical stock option practices. On August 27, 2007, the Court denied certain individual defendants’ motion to dismiss the amended consolidated complaint. On October 12, 2007 the Court granted lead plaintiffs’ motion for class certification and certified a class in this action consisting of all persons and entities who purchased or otherwise acquired the securities of Brocade between May 18, 2000 to May 15, 2005, inclusive, and who were damaged thereby. The Court also partially granted plaintiffs’ motion for partial summary judgment against Mr. Reyes, who is a defendant in this action, prohibiting him from re-litigating in this class action the jury’s finding from Mr. Reyes’ criminal case that he knowingly and willfully made material misrepresentations in Brocade’s Annual Report on Form 10-K for 2001, 2002 and 2003. On December 5, 2007, a federal jury convicted Brocade’s former human resources director, Stephanie Jensen, on two criminal counts related to the Company’s historical stock option practices. (Ms. Jensen is not a defendant in the class action.) On May 30, 2008, Brocade reached an agreement in principle with the lead plaintiffs to settle the federal securities class action that would result in a payment by Brocade of $160.0 million to the plaintiff class in exchange for the dismissal with prejudice of all claims against all defendants in the litigation. The settlement is subject to final documentation and approval by the Federal District Court. Based on the preliminary settlement, Brocade recorded an estimated settlement expense of $160.0 million in connection with the federal securities class action in the three months ended April 26, 2008.

On October 24, 2008, two Stipulation and Agreement of Settlements were filed by the parties. One Stipulation and Agreement of Settlement resolves claims against defendant KPMG LLP. According to that settlement agreement with KPMG, the proposed settlement with is in the amount of $98,500. The other Stipulation and Agreement of Settlement settles claims against defendant Brocade Communications and the individual defendants. According to that settlement agreement, the proposed settlement is in the amount of $160,000,000. On November 18, 2008, the Court granted the motion for preliminary approval of the KPMG settlement.

In a press release dated December 12, 2008, a hearing will be held before the Honorable Charles R. Breyer in the United States District Court for the Northern District of California, San Francisco Division, U.S. Courthouse, 450 Golden Gate Avenue, 19th Floor, Courtroom 8, San Francisco, CA 94102 at 10:00 a.m., on January 23, 2009 to determine whether: (1) the proposed settlement should be approved by the Court as fair, reasonable, adequate and in the best interests of the Class; (2) Class Counsel's application for an award of attorneys' fees and reimbursement of expenses and Class Representatives' application for reimbursement of costs and expenses should be approved; (3) the Court should dismiss with prejudice and release all claims against the Settling Defendants and current and former Brocade officers and directors relating to the conduct alleged in this case; and (4) the Court should rule on such other matters as the Court deems appropriate.

On January 14, 2009, a Modified Stipulation and Agreement of Settlement was filed. On January 23, 2009, the settlement hearing was held before District Court Judge Charles R. Breyer. According to the Order, the Court hereby grants final approval of the Modified Stipulation and Settlement Agreement of January 14, 2009 as modified orally at the Fairness Hearing. The Court further approves the Plan of Allocation, and grants reimbursement of expenses to Plaintiffs' Counsel in the amount of $986,039. The Counsel's motion for award of twenty-five percent of the settlement fund in attorneys' fees is also granted.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Storage Devices
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: BRCD
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-02042
JUDGE: Hon. Charles R. Breyer
DATE FILED: 05/19/2005
CLASS PERIOD START: 02/21/2001
CLASS PERIOD END: 05/15/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  2. Braun Law Group, P.C. (Former)
    12400 Wilshire Blvd., Suite 920, Braun Law Group, P.C. (Former), CA 90025
    888.658.7100 · info@braunlawgroup.com
  3. Brian Barry
    1801 Avenue of the Stars, Suite 307 , Brian Barry, CA 90067
    310.788.0831 310.788.0841 · bribarry1@yahoo.com
  4. 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
  5. Cotchett Pitre Simon & McCarthy
    San Francisco Airport Office Center, 840 Malcolm Road, Suite 200, Cotchett Pitre Simon & McCarthy, CA 94010
    650.697.6000 650.697.0577 · info@cpsmlaw.com
  6. Gainey & McKenna, LLP (former)
    485 Fifth Avenue, 3rd Floor, Gainey & McKenna, LLP (former), NY 10017
    212.983.1300 212.983-0383 · tjmckenna@gaineyandmckenna.com
  7. Glancy Binkow & GoldBerg LLP
    1925 Century Park East, Suite 2100, Glancy Binkow & GoldBerg LLP, CA 90067
    310-201-9150 · info@glancylaw.com
  8. Goodkind Labaton Rudoff & Sucharow LLP
    100 Park Avenue, Goodkind Labaton Rudoff & Sucharow LLP, NY 10017
    212.907.0700 212.818.0477 · info@glrslaw.com
  9. Green Welling LLP (San Francisco,)
    595 Market Street, Suite 2750, Green Welling LLP (San Francisco,), CA 94105
    415.477.6700 415.477-6710 · gw@classcounsel.com
  10. Hagens Berman Sobol Shapiro LLP (Seattle)
    1301 Fifth Avenue, Suite 2900, Hagens Berman Sobol Shapiro LLP (Seattle), WA 98101
    206-623-7292 206-623-0594 · info@hagens-berman.com
  11. Kaplan Fox & Kilsheimer, LLP (former New York, NY)
    805 Third Avenue, 22nd Floor, Kaplan Fox & Kilsheimer, LLP (former New York, NY), NY 10022
    212.687.1980 212.687.7714 · info@kaplanfox.com
  12. Labaton Sucharow & Rudoff LLP
    100 Park Avenue, 12th Floor, Labaton Sucharow & Rudoff LLP, NY 10017
    212.907.0700 212.818.0477 · info@labaton.com
  13. 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
  14. Law Offices of Bruce G. Murphy
    265 Llwyds Lane, Law Offices of Bruce G. Murphy, FL 32963
    561.231.4202 ·
  15. 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
  16. 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
  17. Nix Patterson & Roach, LLP
    205 Linda Drive, Nix Patterson & Roach, LLP, TX 75638
    903.645.7333 ·
  18. Patton, Roberts, McWilliams & Capshaw, LLP
    Century Bank Plaza - Suite 400; 2900 St. Michael Drive, Patton, Roberts, McWilliams & Capshaw, LLP, TX 75503
    903-334-7000 903-334-7007 · website@pattonroberts.com
  19. Rabin & Peckel LLP
    275 Madison Avenue, 34th Floor, Rabin & Peckel LLP, NY 10016
    212.682.1818 212.682.1892 · email@rabinlaw.com
  20. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  21. Schubert & Reed LLP
    Two Embarcadero Center, Suite 1050, Schubert & Reed LLP, CA 94111
    415.788.4220 415.788.0161 · mail@schubert-reed.com
  22. Scott & Scott LLC (Connecticut)
    P.O. Box 192, 108 Norwich Avenue, Scott & Scott LLC (Connecticut), CT 06415
    860.537.5537 860.537.4432 · scottlaw@scott-scott.com
  23. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  24. Wechsler Harwood LLP
    488 Madison Avenue 8th Floor, Wechsler Harwood LLP, NY 10022
    212.935.7400 · info@whhf.com
  25. Weiss & Lurie (Los Angeles)
    10940 Wilshire Blvd., 24th Floor, Weiss & Lurie (Los Angeles), CA 90024
    310.208.2800 310.209-2348 · info@wllawca.com
  26. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 05-CV-02042
JUDGE: Hon. Charles R. Breyer
DATE FILED: 01/02/2007
CLASS PERIOD START: 05/18/2000
CLASS PERIOD END: 05/15/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Nix Patterson & Roach, LLP
    205 Linda Drive, Nix Patterson & Roach, LLP, TX 75638
    903.645.7333 ·
  2. Patton, Roberts, McWilliams & Capshaw, LLP
    Century Bank Plaza - Suite 400; 2900 St. Michael Drive, Patton, Roberts, McWilliams & Capshaw, LLP, TX 75503
    903-334-7000 903-334-7007 · website@pattonroberts.com
No Document Title Filing Date
No Document Title Filing Date