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Case Status:    DISMISSED    
On or around 03/31/2008 (Court's order of dismissal)

Filing Date: August 14, 2006

According to a January 9, 2009 opinion, the Eleventh Circuit Court of Appeals affirmed the District Court's dismissal of the action.

On January 25, 2007, the Court granted an unopposed motion by “Witness Systems Investor Group” for an order consolidating all later-filed securities class actions, appointing the Group as Lead Plaintiff, and approving its selection of Motley Rice LLC and Kahn Gauthier Swick LLC as Co-Lead Counsel. A Consolidated Amended Complaint was filed on April 6, 2007, adding a claim under Section 20(a) of the Exchange Act and naming the Company’s auditor, KPMG LLP, as an additional defendant. In response, the defendants filed motions to dismiss the Consolidated Amended Complaint. On March 31, 2008, Judge Clarence Cooper of the United States District Court for the Northern District of Georgia granted the defendants’ motions to dismiss with prejudice. On April 29, 2008, the lead plaintiff group filed a Notice of Appeal as to the dismissal of the complaint.

The original complaint alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder by failing to disclose to the investing public that the defendants had engaged in the backdating of stock options grants to certain officers of the Company and by failing to account properly for expenses arising from the backdating. The complaint further alleges that defendants thus violated Generally Accepted Accounting Principles and filed false and misleading reports with the Securities and Exchange Commission. The complaint also contends that one or more of the defendants engaged in substantial and suspicious insider trading while in possession of material, non-public knowledge of the alleged backdating scheme.

The complaint further alleges that on or around July 27, 2006, defendant, the Company's Chief Financial Officer, disclosed that the Company was reviewing its stock options grants. On August 8, 2006, the Company announced that its Board of Directors had formed a special committee to investigate the stock option practices because the Company had identified some "discrepancies." The Company delayed the filing of its Form 10-Q for the period ending June 30, 2006, pending the outcome of the investigation. The Company admitted that it "believes it will need to record additional non-cash charges for stock-based compensation expense in prior periods . . . (which) will total approximately $10 million." As a result of the internal investigation, the Board stated that the Company's previously issued financial statements from February 2000 through June 30, 2006, should no longer be relied upon. Just three days later, on August 11, 2006, the Company disclosed that it intended to restate its prior financials and revealed that NASDAQ informed it on August 11 that the Company may be subject to delisting as a result of the matters disclosed thus far.

The price of Witness Systems common stock has fallen from its July 27, 2006, closing price of $18.19 per share to as low as $12.76 per share. The stock closed at $12.91 per share on August 11, 2006.

COMPANY INFORMATION:

Sector: Technology
Industry: Software & Programming
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: WITS
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. Georgia
DOCKET #: 06-CV-1894
JUDGE: Hon. Clarence Cooper
DATE FILED: 08/14/2006
CLASS PERIOD START: 04/23/2004
CLASS PERIOD END: 08/11/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kahn Gauthier Swick, LLC (New Orleans)
    650 Poydras St. Suite 2150, Kahn Gauthier Swick, LLC (New Orleans), LA 70130
    504.455.1400 · lewis.kahn@kglg.com
  2. Motley Rice LLC (Atlanta)
    One Georgia Center; 600 West Peachtree Street, Suite 800, Motley Rice LLC (Atlanta), GA 30308
    1-800-768-4026 · inquiry@motleyrice.com
No Document Title Filing Date
COURT: N.D. Georgia
DOCKET #: 06-CV-1894
JUDGE: Hon. Clarence Cooper
DATE FILED: 04/06/2007
CLASS PERIOD START: 04/23/2004
CLASS PERIOD END: 08/11/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kahn Gauthier Swick, LLC (New Orleans)
    650 Poydras St. Suite 2150, Kahn Gauthier Swick, LLC (New Orleans), LA 70130
    504.455.1400 · lewis.kahn@kglg.com
  2. Kahn Gauthier Swick, LLC (NY)
    12 East 41st Street, 12th Floor, Kahn Gauthier Swick, LLC (NY), NY 10016
    212.920.4310 212.696.3730 · info@kglg.com
  3. Motley Rice LLC (Atlanta)
    One Georgia Center; 600 West Peachtree Street, Suite 800, Motley Rice LLC (Atlanta), GA 30308
    1-800-768-4026 · inquiry@motleyrice.com
No Document Title Filing Date
No Document Title Filing Date
No Document Title Filing Date