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Case Status:    DISMISSED    
On or around 04/28/2006 (Date of order of final judgment)

Filing Date: May 24, 2005

According to a press release dated May 2, 2006, Cray Inc. reported that on April 27, 2006, Judge Thomas S. Zilly of the U.S. District Court for the Western District of Washington dismissed both the consolidated class action litigation filed against the Company and certain of its present and former officers and directors, as well as the consolidated derivative litigation filed against the Company's present and former officers and directors.

The class action against the Company and five of its present and former officers and directors initially filed in May 2005 alleged that the defendants had violated the securities laws by knowingly making false or misleading statements to the public. Judge Zilly, in a 49-page opinion, found that plaintiffs failed to plead adequately that defendants intentionally or recklessly made false statements (acted with scienter), and failed to plead adequately that many of the statements made by defendants were false. Judge Zilly also ruled that plaintiffs failed to plead adequately that plaintiffs' alleged losses were caused by some of defendants' actions. The Court gave the class action plaintiffs 120 days to file an amended complaint should they choose to do so.

The original complaint alleges that during the Class Period, Cray failed to disclose and misrepresented material adverse facts which were known to defendants or recklessly disregarded by them, including: (1) that business metrics having a direct bearing on revenue recognition, including the speed and costs of on- site acceptance testing or improved processes for building machines in accordance with customer requirements, were increasingly unfavorable and unlikely to improve anytime soon (2) manufacturing processes internal controls and testing were flawed and ineffective; (3) Cray's own auditors and Audit Committee knew of the flawed and ineffective internal controls; (4) delays in inventory recognition realization and revenue were a recurring and unpredictable feature of Cray's business model; and (5) Cray was losing money or breaking even on certain customer orders.

The complaint further alleges that on or around May 9, 2005, Cray revealed that it had failed to include an auditor's opinion on management's assessment of internal control over financial reporting. Moreover, Cray continued to report revenue results adversely impacted by faulty internal controls and past quarter practices. In response, Cray's stock price fell $0.74 per share over a three-day period ending May 12, 2005 -- an astonishing 35.6% loss -- to close at $1.34 on 9.5 million shares combined volume.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Hardware
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: CRAY
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: W.D. Washington
DOCKET #: 05-CV-00943
JUDGE: Hon. Thomas S. Zilly
DATE FILED: 05/24/2005
CLASS PERIOD START: 07/31/2003
CLASS PERIOD END: 05/12/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Federman & Sherwood (Oklahoma City)
  2. Glancy Binkow & Goldberg LLP (Los Angeles)
  3. Glancy Binkow & Goldberg LLP (NY)
  4. Hagens Berman Sobol Shapiro LLP (Seattle)
  5. Law Offices of Charles J. Piven, P.A.
  6. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
  7. Milberg Weiss Bershad & Schulman LLP (New York)
  8. Murray, Frank & Sailer LLP
  9. Schatz & Nobel, P.C.
  10. Schiffrin & Barroway LLP
  11. Scott & Scott LLC (Connecticut)
  12. Shalov Stone & Bonner LLP
  13. Smith & Smith LLP
  14. Spector, Roseman & Kodroff (Philadelphia)
No Document Title Filing Date
COURT: W.D. Washington
DOCKET #: 05-CV-00943
JUDGE: Hon. Thomas S. Zilly
DATE FILED: 11/15/2005
CLASS PERIOD START: 10/23/2002
CLASS PERIOD END: 05/09/2005
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. 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
  2. Keller Rohrback LLP (Seattle)
    1201 Third Avenue, Suite 3200, Keller Rohrback LLP (Seattle), WA 98101-3052
    800.776.6044 206.623.3384 · investor@kellerrohrback.com
  3. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Seattle)
    1700 Seventh Avenue, Suite 2260 , Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Seattle), WA 98101
    206-749-5544 206.749-9978 ·
  4. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
No Document Title Filing Date
No Document Title Filing Date