On March 28, 2006, the plaintiff filed a Stipulation of Dismissal, voluntarily dismissing the case. On March 29, 2006, the Court entered the Order signed by U.S. District Judge Marilyn Hall Patel, and the case was dismissed.
According to a press release dated December 5, 2005, the complaint alleges that during the Class Period, defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 by publicly issuing a series of false and misleading statements regarding the Company's financial condition, thus causing Ciphergen's shares to trade at artificially inflated levels.
Specifically, the complaint alleges that on November 16, 2005, Ciphergen disclosed, inter alia, that its Audit Committee had determined that the Company's previously reported results for the quarter-ended June 30, 2005 should no longer be relied upon and would need to be restated because revenue was recognized on certain transactions "in a manner inconsistent with the Company's revenue recognition policy." Indeed, the Company indicated that the restatement would reduce previously reported revenues for such quarter by $503,000 or 7% and result in an increase in the Company's previously reported net loss for such quarter by $301,000 or 3%. The Company also advised that the Audit Committee's investigation was not yet complete and that it was also "reviewing the appropriateness of revenue recognition in connection with certain transactions that took place in the fourth quarter of fiscal 2004 and in fiscal 2005."
The complaint further alleges that on or around November 17, 2005, as a result of these disclosures, the complaint alleges that the price of Ciphergen common stock declined from a prior day close of $1.73 to close at $1.36 per share, a decline of approximately 21%, on unusually heavy volume.