The original Complaint alleges that during the May 2, 2006 through Apr 17, 2007, Class Period, defendants knew or recklessly disregarded that Occam Networks, Inc.’s (the "Company") reported financial results were the product of improper revenue recognition concerning the Company's commitments to provide customers with (i) software, hardware and software maintenance, (ii) hardware and software upgrades, and (iii) training, and other services in connection with customers' purchases of the Company's network equipment, and that during the Class Period the Company's internal controls were materially defective.
On April 2, 2007, after the close of trading, Occam Networks surprised investors by disclosing that it would not file its Annual Report on Form 10-K for the year ended December 31, 2006, because "its Audit Committee is reviewing the Company's commitments to provide customers with software, hardware and software maintenance, hardware and software upgrades, training, and other services in connection with customers' purchases of the Company's network equipment." ...
On April 3, 2007, the next trading day, Occam Networks shares declined from the previous day's close of $11.10 per share, to close on April 3, 2007,at $8.51 per share -- a decline of $2.59 per share or approximately 23%, on heavier than usual volume. Then on April 17, 2007, after the close of trading, Occam disclosed that that it would "not file its Annual Report on Form 10-K for the fiscal year ended December 31, 2006 by today's 15-day extended filing deadline." On April 23, 2007, the Company disclosed that it received a notice from NASDAQ stating that because the Company had not timely filed its annual report, Occam Networks was not in compliance with NASDAQ marketplace rules.
On July 30, 2007 the judge consolidated all related cases, selected lead plaintiffs and approved choice of lead counsel. Lead Plaintiffs filed their First Consolidated Complaint on November 16, 2007. Defendants filed motions for dismissal on January 25, 2008. On July 1, 2008, the U.S. District Court for the Central District of California dismissed certain claims in a consolidated securities fraud class-action lawsuit against Occam Networks, Inc.
Plaintiffs filed a Second Consolidated Complaint, addressing previous pleading deficiencies on July 16, 2008. Rather than filing further motions to dismiss, all defendants filed answers to the complaint on August 29, 2008. On November 17, 2008, District Court Judge Christina A. Snyder ordered the case to a private mediator based upon a stipulation of the parties.
On February 27, 2009, the lead plaintiff filed a motion to certify the class. On August 7, 2009, certain defendants filed a stipulation to certify the class, and on August 10, 2009, Judge Christina A. Snyder signed the Order certifying the Section 10(b) class.
According to a press release dated September 10, 2009, Occam Networks®, Inc. (NASDAQ:OCNW), a leading broadband access supplier offering multiservice access platform (MSAP) solutions based on pure packet technologies, announced that it has agreed to settle and resolve a stockholder class action lawsuit initially filed on April 26, 2007 against Occam, certain of its current and former officers and directors, Occam’s current and former outside auditors, and the lead underwriter of Occam’s November 2006 secondary public offering. The litigation is pending in the United States District Court for the Central District of California and relates to a restatement of Occam’s historical financial statements that was announced and completed during 2007. The settling parties have entered into a memorandum of understanding and will sign and submit a formal, binding stipulation of settlement to the court in the coming weeks. The settlement will resolve this matter as to all defendants other than Occam’s current outside auditor who is not part of this settlement. The settlement provides for a payment to the class of $12.66 million, of which Occam has agreed to contribute $1.7 million and the balance of which will come from Occam’s insurers and another settling defendant.
On November 12, 2009, Judge Christina A. Snyder preliminarily approved the settlement. A Settlement Hearing is scheduled for February 22, 2010, to determine whether the proposed settlement of the Litigation on the terms and conditions provided for in the Stipulation is fair, reasonable, and adequate to the Class and should be approved by the Court.
On February 23, 2010, the Court entered the orders approving the Plan of Allocation, motion for attorney's fees and expenses, and the motion for final settlement. The action is dismissed with prejudice.