Cbeyond, Inc. is a voice and broadband Internet provider that markets to small businesses in the United States.

The original lawsuit charges Cbeyond and its founder, Chairman, President and CEO, with violating Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and certain rules thereunder. The case alleges that beginning on November 1, 2007, the Defendants made specific misstatements designed to hide the fact that Cbeyond was recording a higher churn rate for its services, which permitted certain of Cbeyond's officers and directors to engage in insider sales of $39 million of Cbeyond stock at artificially inflated prices. Shortly thereafter, Cbeyond was forced to admit on February 21, 2007 that it elected to make certain operational changes that caused its churn rate to climb even higher, contrary to its prior representations. Cbeyond's stock price dropped 20% on this shocking news.

On August 21, 2008, U.S. District Judge Clarence Cooper issued the Order granting the motion to appoint the Genesee County Group as lead Plaintiff and appointed Labaton Sucharow LLP as lead Counsel. The Order also established 1:08-cv-1666-CC, In Re Cbeyond, Inc. Securities Litigation, as the Master Docket. On October 24, 2008, the lead Plaintiffs filed a Consolidated Amended Complaint. On December 23, 2008, the Defendants filed a motion to dismiss the Consolidated Amended Complaint.

On August 28, 2009, a Stipulation and Agreement of Settlement was filed. The proposed settlement is in the amount of $2.3 million. On September 17, 2009, Judge Clarence Cooper preliminarily approved the proposed settlement. The Settlement Hearing was set for January 5, 2010. On January 5, 2010, Judge Clarence Cooper approved the settlement, approved the plan of allocation and granted the motion for attorney fees and reimbursement of expenses. The Final Order and Judgment was entered the same day and the action was dismissed with prejudice.