According to a law firm press release, the Complaint charges Integral Systems and certain of its executive officers with violations of federal securities laws. Among other
things, plaintiff claims that defendants' material omissions and dissemination of materially false and misleading statements concerning the Company's business, operations and prospects, caused Integral Systems' stock price to become artificially inflated, inflicting damages on investors. Integral Systems builds satellite ground systems and equipment for command and control, integration and test, data
processing, and simulation.
The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements were materially false and misleading. Specifically, the Complaint alleges that defendants' public statements were false and misleading or failed to disclose or indicate the following: (1) that the Company improperly recognized revenue; (2) that as a result, the Company misstated its financial results during the Class Period; (3) that the Company's
financial results were not prepared in accordance with Generally Accepted Accounting Principles; (4) that the Company lacked adequate internal and financial controls; and (5) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On December 11, 2008, Integral Systems shocked investors when it revealed that the unaudited financial statements of the Company for the interim periods ended December 31, 2007, March 30, 2008 and June 30, 2008 should no longer be relied upon due to an error in the accounting treatment for certain transactions with respect to the timing of the recognition of revenue between periods. The Company further disclosed that, as a result, the Company would restate its previously filed financial statements for those interim quarterly periods in fiscal year 2008. The Company estimated that the net impact of the adjustments for the first three quarters of 2008 would result in a decrease of approximately $10 million in revenues, a decrease of approximately $3 million in gross profit, a decrease of approximately $4 million in
operating income, and a decrease of approximately $0.13 in earnings per share. On this news, shares of Integral Systems declined $6.38 per share, or 28.61%, to close on December 11, 2008 at $15.92 per share, on unusually heavy volume.
On February 17, 2009, a [proposed] order granting motion of the Ulrich group for appointment as lead plaintiff and approval of lead plaintiffs selection of co-lead counsel was entered into the court’s record.
On July 21, 2009, an order was granted dismissing that the Complaint without prejudice in accordance to the provisions of Rule 4(m) of the Federal Rules of Civil Procedures.
On August 24, 2009, an order on plaintiffs' motion for relief from judgment was granted. The
July 21, 2009 Order of this Court was thereby vacated and the complaint filed therein was reinstated. Also, an order granting motion of the ulrich group for appointment as lead plaintiff and approval of the lead plalintiff's selection of co-lead counsel was entered into the court record.
On September 21, 2009, an amended class action complaint for violations of the federal securities laws against all defendants, was filed by the Plaintiffs.
On February 25, 2010, an order on the Defendant’s motion to dismiss the Plaintiff’s amended class action complaint was granted and judgment for costs were entered in favor of Defendants and the case was closed.