Case Page

 

Case Status:    SETTLED
On or around 11/27/2002 (Date of order of final judgment)

Filing Date: December 21, 1999

According to the Company’s FORM 10-Q For the quarterly period ended September 30, 2002, the Company conducted mediation and reached an agreement with the plaintiffs to settle the lawsuit for a payment of $1.25 million to the plaintiffs, without an admission of liability by any party. The agreement between the Company and the plaintiffs was approved by the District Court in September 2002. The Company's insurer paid $1.0 million of the cost of the settlement. Accordingly, the Company recorded a $250,000 expense during the three months ended June 30, 2002, which is included in selling, general and administrative expense in the accompanying condensed consolidated statement of operations.

Previously, in September 2000, after the plaintiffs had filed a first amended complaint, the Federal District Trial Court dismissed the lawsuit with prejudice, stating that the plaintiffs had failed to state a claim against the Company and its officers. In October 2000, the plaintiffs filed an appeal of the dismissal of the lawsuit, and the dismissal was overturned in February 2002. The case was remanded back to the District Court with instructions to allow the plaintiff to file a second amended complaint.

The original action charges that SafeGuard and certain of its officers violated
the securities laws and regulations of the United States by issuing a
series of false and misleading statements concerning the Company's
publicly reported revenues and earnings during the Class Period. After
the close of trading on November 12, 1999, the Company issued a press
release announcing that it believed its revenues, and therefore its
earnings, for the quarter and nine months ended September 30, 1999,
which were previously announced on October 21, 1999, were overstated by
a material amount. The Company further disclosed its belief that it may
have to restate the Company's results of operations for the periods
ended March 31, 1999 and June 30, 1999. SafeGuard also warned that that
it expected to restate its financial statements for the years ended
December 31, 1998 and 1997, as well as certain quarterly periods
therein. The Company cautioned that the 1998 and 1997 annual financial
statements and the independent auditors' report thereon should not be
relied upon. The Company had previously restated certain of these
financial results. Thus, the Company announced that it was now going to
restate, restated financial results, in addition to other financial
results. As a result of these revelations, SafeGuard's stock collapsed,
falling from over $3 to just under $1 the day after the revelations.

COMPANY INFORMATION:

Sector: Financial
Industry: Insurance (Accident & Health)
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: SFGD
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: C.D. California
DOCKET #: 99-CV-01575
JUDGE: Hon. David O. Carter
DATE FILED: 12/21/1999
CLASS PERIOD START: 02/26/1999
CLASS PERIOD END: 11/13/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman, DeValerio & Pease LLP
    One Liberty Square, Berman, DeValerio & Pease LLP, MA 02109
    617.542.8300 ·
No Document Title Filing Date
COURT: C.D. California
DOCKET #: 99-CV-01575
JUDGE: Hon. David O. Carter
DATE FILED: 05/16/2000
CLASS PERIOD START: 02/26/1999
CLASS PERIOD END: 11/13/1999
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. Berman DeValerio Pease Tabacco Burt & Pucillo (MA)
    One Liberty Square, Berman DeValerio Pease Tabacco Burt & Pucillo (MA), MA 02109
    617.542.8300 ·
No Document Title Filing Date